TORONTO, ON--(Marketwired - March 07, 2016) - Bankruptcy Canada Inc. is predicting that Consumer Proposals may outnumber personal Bankruptcy filings in Canada as early as 2016.

The Toronto company, which operates a popular website offering up-to-date information on consumer insolvency solutions, keeps tabs on Canadian financial trends that affect consumers.

"We've seen this coming for some time now," said company President Jarret Austin. "A Consumer Proposal is often a better solution for consumers who have a regular income. In Ontario, there are already more Consumer Proposals filed than personal Bankruptcies."

Consumer Proposals became possible in the mid-1990s, but according to the Office of the Superintendent of Bankruptcy in Canada (OSB), in 2000, only 6.4% of Canadian consumer insolvencies were handled via Consumer Proposals. However, by 2015 Consumer Proposals rivaled Bankruptcy, at 47.9%. In Ontario, the rate of Consumer Proposals now exceeds that of Bankruptcy, at 55% of insolvencies addressed in 2015.

A Consumer Proposal is a Bankruptcy alternative that allows an insolvent debtor with a regular income to make payments for up to five years to satisfy creditors. Creditors agree by majority vote. The solution is popular with creditors because it allows recovery of a greater percentage of the amount owed, as compared to that available in a Bankruptcy. As with a Bankruptcy, the agreement is legally binding on all parties.

Better consumer education on insolvency solutions has bolstered the increase in Consumer Proposals filed. Also, the solution has gained ground with Trustees, attracted by its better workload/revenue profile when compared to administering a Bankruptcy.

The news on Canadian consumer insolvency is good: rates have been decreasing. The insolvency rate as a percentage of the Canadian adult population has steadily decreased since 2009's peak of 5.8 insolvencies per 1,000 consumers, to close to 4% per 1,000 in the past three years.

Bankruptcy Canada Inc. cautions that although this decrease is good news, insolvency rates are still higher than 20 years ago, with more than 100,000 Canadians filing for Bankruptcy or a Consumer Proposal each year.

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Contact Information:

Jarret Austin
Bankruptcy Canada Inc.
(647) 693-8800