Consumer bankruptcies are rising almost twice as fast as proposals. Here's what August's numbers say.

The Office of the Superintendent of Bankruptcy (OSB) published its August figures last week, and the headline number is stark: 146,135 consumer insolvencies in the 12 months ending Aug. 31, 2026, up 5.8% from the year before. That works out to roughly 400 Canadians a day turning to a Licensed Insolvency Trustee because their debts have become unmanageable.

For context, the 12-month total to the end of July — 145,681 filings — was the second-highest since records began in 1987, behind only 2009, according to The Globe and Mail. And the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) reported that the second quarter of 2026 saw 37,523 consumer insolvencies, the most in any quarter since 2009.

The number to watch: bankruptcies vs. proposals

There are two ways for an individual to formally deal with debt under the Bankruptcy and Insolvency Act: a consumer proposal, where you offer creditors a reduced, fixed repayment over up to five years, or a bankruptcy, where most unsecured debts are eliminated in exchange for giving up certain non-exempt assets and paying into the estate based on income.

Over the last 12 months:

Filing type	12 months to Aug. 2026	Change vs. year before
Consumer proposals	114,026	+4.8%
Consumer bankruptcies	32,109	+9.5%
All consumer insolvencies	146,135	+5.8%

Proposals still make up the large majority of filings — 78.0% — but that share has slipped from 78.8% a year ago. Bankruptcies are growing nearly twice as fast.

Why does that matter? A proposal depends on being able to afford a steady monthly payment. When more people choose bankruptcy, it usually means more households have reached the point where even a reduced payment isn’t realistic. In our day-to-day work, that tends to happen when someone has waited a long time — drawing on savings, borrowing to make minimum payments, or falling behind on taxes — before asking for help.

Where filings are rising fastest

The increase isn’t even across the country. Over the same 12 months:

• British Columbia: 16,736 filings, up 13.3%
• Manitoba: 4,216 filings, up 9.4%
• Ontario: 57,756 filings, up 8.3% — by far the largest total
• Alberta: down 0.8%

Ontario alone accounts for roughly four in ten insolvencies in Canada. Credit-bureau data points the same way: Equifax Canada says missed mortgage payments in Ontario have risen every quarter for four years, and late payments on cards and loans among Ontario mortgage holders are up 27% from a year ago.

One month doesn’t make a trend

August on its own was a little quieter. The OSB counted 12,185 total insolvencies in the month (consumer and business combined), down 3.8% from July but up 4.0% from August 2025. Monthly numbers bounce around with the calendar; the 12-month total is the better gauge, and it is still climbing.

What this means if you’re struggling

If you’re relying on credit to cover everyday costs, or you’re only able to make minimum payments, the numbers above are a reminder that you are far from alone — and that formal options exist for exactly this situation.

A few practical points:

1. Earlier gives you more choices. A proposal lets you keep your assets and repay a portion of what you owe, but you need enough income to make the payments. Waiting until that income is stretched to zero can leave bankruptcy as the only route.
2. Consultations are free. Every Licensed Insolvency Trustee offers a free, confidential first meeting, and only a trustee can file a proposal or bankruptcy. If you want to understand the process first, here’s a clear explanation of how a consumer proposal works.
3. Be wary of “debt relief” companies that aren’t trustees. Some charge upfront fees and then refer you to a trustee anyway. You can check anyone’s licence in the OSB’s public directory.

We’ll be watching the September numbers, due in November, to see whether the shift toward bankruptcy continues.