Insolvency filings surged in January amid higher interest rates, inflation

The Office of the Superintendent of Bankruptcy says the total number of insolvencies in Canada in January was up by roughly a third compared with a year earlier.

The federal regulator says there were 9,066 insolvencies for the first month of the year, up 33.7 per cent from 6,779 in January 2022.

The increase came as rising interest rates have driven up the cost of borrowing and inflation has increased the cost of living and stretched household budgets for Canadians.

The number of consumer insolvencies for the month rose 33.0 per cent compared with a year earlier.

There were 8,735 insolvency filings by consumers for January including 1,859 bankruptcies and 6,876 proposals. The result compared with 6,566 insolvency filings by consumers in January 2022 when there were 1,768 bankruptcies and 4,798 proposals.

Business insolvency filings for January were up 55.4 per cent compared with a year ago as they totalled 331, up from 213 in January 2022.