Demographic Shift? Worsening Income Inequality in Ontario Leading to Higher Rates of Insolvency
Bankruptcy has, for decades, proven to be an incredibly important resource for those Canadians struggling to meet their monthly obligations, and for good reason. It provides a fresh start when things have become too difficult to handle, providing significant relief from overwhelming debts and reducing the overall amount a person is required to repay.
That being said, worsening income inequality is making bankruptcy far more common a solution for certain segments of the population. Insolvency rates in Ontario are rising. The economy is making it more and more difficult for those in certain situations to meet rising costs. Who is filing most often? Seniors, millennials and single parents.
According to a study reviewed by the Globe and Mail, seniors over the age of 60 account for 12% of insolvency filings, whereas those under 30 account for 14%. Single parents were also disproportionately represented in the findings. While single-parent families account for about a fifth of Canadian families, they represent 43% of households with dependents who file.
For millennials, student loans are a big part of the problem, as is the tough job market. Tuition costs have risen across the country, making it harder and harder for the average Canadian student to obtain a diploma or degree without some debt following them off campus. According to Statistics Canada, the average full-time undergraduate student is paying nearly $6,400 in tuition for the 2016-2017 school year, compared to about $4,400 a decade ago. That’s a big difference. Where is the money coming from? Most often from student loans.
For seniors, or those looking ahead to retirement, debt is rising (and thus the number of bankruptcies), often thanks to a desire to help their children enter this incredibly turbulent housing market or pay for those sky-high tuition fees.
Another problem for both millennials and single parents struggling to make ends meet is the dreaded payday loan. With advertisements claiming loans for as little as $1, many heads are turned in the belief that payday loans are the answer for quick cash. However, these have proven to be quite devastating because they quickly become almost impossible to pay off.
With income inequality continuing to make it harder for certain demographic groups to live without debt, bankruptcy represents an important debt solution that can narrow the gap. If you’re looking to take advantage, just remember to speak with a financial consultant first to secure your own representation, before heading to a trustee in bankruptcy. Since bankruptcy trustees represent both you and your creditors, it is best to have someone with you who has your back.
At DebtCare, you are our first and only concern. If you’re looking for more information about bankruptcy, please get in touch with us today: 1 (888) 890-0888.