Canadian Bankruptcy Rate Skyrockets

The number of bankruptcies filed by Canadian consumers and companies jumped 52% in March, according to the latest figures from the Office of the Superintendent of Bankruptcy. This continues the trend from February, when bankruptcies rose by 22%.

The March report breaks down bankruptcies by region, with Ontario taking the lead with 3,734 consumer insolvencies (which includes both bankruptcies and consumer proposals).

While declaring bankruptcy does erase your mounting debts, it will also devastate your credit score. Bankruptcies appear on your credit report as an R9 rating - the equivalent of a very large red flag. This mark can stay on your report for up to 7 years, depending on the region you live in. During this time, it will be very difficult to obtain a new loan or line of credit.

Other economic indicators

Canada is experiencing its first recession since 1992. For more information on Canada's current economic state, take a look at the Bank of Canada's latest Monetary Policy Report, which shows that "deteriorating credit conditions have spread quickly through trade, financial, and confidence channels."