Shoppers pass through Toronto’s Eaton Centre on Boxing Day, 2025. Even with a bigger debt burden, more Canadians delayed filing for insolvency in 2025, new study shows.Sammy Kogan/The Canadian Press
Canadians are borrowing money across more accounts and at later stages of financial stress as debt balances hit record highs, a new bankruptcy study has found.
The average insolvent debtor owed $67,496 in unsecured debt, including credit card loans and payday loans, in 2025, Monday’s report from Ontario bankruptcy trustee firm Hoyes, Michalos & Associates Inc. found. It’s the highest average level the firm has recorded since it began tracking that debt 15 years ago.
The study, which reviewed the details of 3,870 personal insolvencies in Ontario from Jan. 1 to Dec. 31, found that even with a bigger debt burden, more Canadians delayed filing for insolvency by layering their loans.
“We’re kicking the can down the road,” said Doug Hoyes, a licensed insolvency trustee and co-founder of Hoyes, Michalos & Associates. “Canadians are borrowing more, they’ve got more accounts and larger balances – it’s just more and more and more.”
The average number of creditors for each debtor now sits at 10.5 – levels unseen since 2013 – while their average number of credit cards in rotation increased 13 per cent from the year before to 3.5.
The data contrasts recent findings that show consumer insolvencies have largely flatlined in recent months, suggesting that the headline figures miss a harsher reality in which Canadian households are stretched thin.
Data from the Office of the Superintendent of Bankruptcy, for instance, showed that consumer insolvencies dipped 3.8 per cent in the fourth quarter of 2025 compared to the third quarter, and were slightly above the fourth quarter of 2024 by 3.3 per cent.
In recent months, Statistics Canada data has shown that while overall inflation has hovered around 2.2 per cent, grocery prices climbed by multiyear highs of 4.7 per cent or more.
While the country’s unemployment rate fell to 6.5 per cent in January, the Chartered Professional Accountants of Canada’s chief economist warned that the numbers reflect a shrinking labour force, a decline driven by slower population growth.
As Canadians weather employment and food expense challenges, overall debt loads have grown about 11 per cent from the year prior, Monday’s report found, and nearly 37 per cent over the past three years.
The profile of people reaching insolvency is also shifting. A bigger share of insolvencies now involve homeowners and two-income households, while the average monthly income of insolvent individuals rose by 6.1 per cent to $3,434 in 2025.
Canadians’ outlook on debt improved in December, report finds – but signs of trouble persist
“You would think that’s great, their income went up,” said Mr. Hoyes. “But I’m dealing with people who are making more money but can’t make a go of it.”
While Canadian singles still bear most of the burden when it comes to debt – accounting for 44 per cent of insolvency filings – the share of married or common-law filers is also rising.
The report found that the proportion of two-income households reaching insolvency rose to 23 per cent, the highest level since 2017. This also lines up with rising homeowner insolvencies, which now make up eight per cent of filings compared to five per cent in 2024.
“Owning a home used to give you a certain amount of protection,” said Mr. Hoyes. “It’s now the opposite – mortgage renews at a higher interest rate, now I‘ve got to pay more each month.”
Nearly one in four homeowner insolvencies last year involved negative equity, the report found, and hundreds of thousands of mortgage renewals at higher rates are still set to work their way through the system.
“What all this is telling us is the fact that insolvencies were low in 2025, doesn’t mean Canadians are doing better,” said Mr. Hoyes. “They’re borrowing more to pay the piper.”