People who file for bankruptcy in the province of Ontario are earning 41 per cent below the median salary and simply cannot meet their expenses, according to a recent report. And it seems their low revenues put them in difficulty even before they take on any debt.
Insolvency trustees Hoyes, Michalos & Associates prepares a study on insolvent Ontarians every two years. It found that income insecurity is driving bankruptcies among millennials, seniors and single parents.Listen
‘Definitely an income problem’
“I think this is definitely an income problem,” says Doug Hoyes, co-owner of the firm and co-author of the report. “The people who are getting into trouble have incomes much lower than the average person.”
Young people, for example, are often carrying heavy burdens of student debt and are unable to find full-time jobs. Seniors may be in debt when they retire and not have enough income to service their debt. And single parents have the expenses of raising children and may not be able to work full time or simply not earn enough to make ends meet.
‘Are we doing enough’
“We have an income problem. We also have an expense problem,” says Hoyes. “And I think, as a society, we’re going to have to take a step back and look at it and say, is our education system serving the needs of society, is post-secondary education so expensive that the only way students can attend it is if they take on massive amounts of debt that are going to burden them for years to come?
“Are we doing enough for seniors who are approaching retirement and often with debt and once their income become fixed in retirement they’re not able to service it?”
Hoyes says he cannot offer solutions to societal problems but he can help individuals use insolvency rules that have been set up to protect them.