What does the average debtor look like? What is the difference between you and the average bankrupt… meet Joe Debtor.
For those of you who have not heard of Joe Debtor, this is ananalysis that is done every couple of years by one of my colleagues in Toronto (Doug Hoyes of Hoyes Micholas). It is a statistical summary that provides a picture of the typical insolvent person and it is very interesting. This is a great way to help you determine how positive or negative your current financial picture is.
Some of their key findings were as follows:
The average age of someone filing for a bankruptcy or a consumer proposal was 43. Interestingly this is 2 years older than the last time they ran this study. This suggests there is greater risk for those approaching retirement (see The Aging Face of Personal Debt: Squeezed From All Sides). This makes logical sense as we see our baby boom generation age, and all can appreciate the pressure many will face as the move to having to live on a fixed income.
Another one of their findings is that 28% of those who had filed a bankruptcy or a consumer proposal listed marital breakdown as one of their major causes of financial problems.
Of those who filed for bankruptcy or a consumer proposal they found that 81% of them were working at the time of their filing. So you don’t need to be struggling with employment to have financial difficulties. This makes sense as we see the average Canadian’s debt to income ratio climb (the last figure was this rate sat at 165%, meaning that each individual in Canada, on average, owes $165 for every dollar they bring home.
The big finding, in my opinion, is that the average person who filed for bankruptcy or a consumer proposal in this study had a total unsecured debt of $61,096. Not only is this 2% higher than in previous years, but this is 3 times the national average.
There are a number of interesting trends that this study identifies, and trends that deserve a little more attention. But the most important thing to take from this report is that you are not alone. Financial troubles are not limited to the sick, the unemployed, or the homeless. We live in a society where the average insolvent person is no different than you or I.