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Do You Look Like the Typical Bankrupt Canadian?

Of course no one can tell just by looking at you if you’re going to go bankrupt at some point in your life. But bankruptcy trustees Hoyes, Michalos & Associates just searched through hundreds of bankruptcy filings from 2011 and 2012 to try and determine what the typical bankrupt Canadian looks like, and what groups are in the most danger for going bankrupt.

According to their findings, the typical bankrupt Canadian is a 43-year-old man with over $61,000 in debt. That’s close to three times the national average of non-mortgage debt per Canadian, which currently sits at $18,000. These findings differ slightly from the same study that was done back in 2009. Then it showed the typical bankrupt Canadian was 41 years old, still male, and that they owed two per cent less at that time.

But males in their 40s shouldn’t panic just yet. They aren’t actually even the group that’s most troublesome. That would be the group of those aged 50 to 59, who have racked up enormous amounts of debt along the way. Ted Michalos, a trustee with the bankruptcy firm, says that with credit cards, unsecured lines of credit, and personal loans, this group averages more than $84,000 in debt – a huge warning sign for those in this group that are carrying that much.

“The most at risk group are ‘pre-retirement debtors,’” he says. “At a time in their lives when they should be rapidly paying down their debt, their financial burden continues to grow.”

Perhaps those in this group are at greater risk because financial life is simply harder for them. While 81 per cent were working, they earned less than those one age group down from them – the 40 to 49 year olds – and many of those in their 50s had at least one dependent living with them, and a home that still has a sizable mortgage on it.

“They are squeezed from all sides,” says Douglas Hoyes, a bankruptcy trustee with the firm. “They are often supporting both older children and aging parents, making debt payments, and may also be dealing with medical expenses for themselves or family members.”

And the picture doesn’t get any better for those in this group. Among those who filed for bankruptcy, their average debt-to-income ratios were way past the 165 per cent national average, which is already too high. For those aged 50 to 59, their debt-to-income ratios sat at nearly double that, 297 per cent. The average debt-to-income ratio in the overall survey for all groups was 215 per cent.

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