Every two years Hoyes, Michalos & Associates, examine data that we have compiled by law from each debtor that has filed with us. We know their income, family situation, family size, age, gender, assets and debts. We use all of this information to determine what the average insolvent debtor looks like in Canada – we call this person Joe Debtor. You can read all our findings here.
One of the key findings that we found was that Joe Debtor is married, however there is a high probability that his marriage or relationship will end in separation or divorce. I’m not saying that bankruptcy will be the cause of the divorce, but a lot of the time a divorce could end in bankruptcy.
Here’s how, financial problems is a major cause of separation or divorce. When couples have high amounts of debt, they usually begin to argue about money, and that stress can lead to separation or divorce. Once separated, they go from managing their bills on one income rather than two incomes and often start to rely on credit to meet their monthly necessities. Also potential legal costs can also increase a newly separated person’s debt.
Because of this a lot of the time divorce and bankruptcy go hand in hand.
In our study, we found that 28% of insolvent debtors were divorced or separated at the time of filing and when explaining the reasons for insolvency 18% of insolvent debtors listed marital or relationship breakdown as the cause of their insolvency. We found that these numbers are increasing from our last study, which suggests that many Canadians are struggling with their debts after separation or divorce.
If you are one of the many Canadians that have gone through a separation or divorce and are now faced with high amount of debt and are struggling to manage it on your own. Give me a call @ 310-PLAN (no area code required) or send me an email and I will talk about how a consumer proposal or a bankruptcy may be a good option for you to eliminate your debts.
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