Insolvency trustee Doug Hoyes encounters a lot of Canadians with money troubles, but he害羞草研究所檚 become particularly sympathetic to the plight of young people who find themselves financially underwater.

For more than a decade, his Ontario-based firm Hoyes Michalos has been crunching bankruptcy and insolvency numbers for its annual 害羞草研究所淛oe Debtor害羞草研究所� analysis, with its latest results released last month ahead of tax season.

He害羞草研究所檚 concluded that millennial Canadians have been dealt a generational losing hand as they face student loans layered with bad debts from credit cards, high-interest loans, and post-pandemic tax debt from collecting CERB.

害羞草研究所淚 think there害羞草研究所檚 a whole bunch of whammies that have hit millennials.害羞草研究所� Hoyes said. 害羞草研究所淭he CERB was the final straw that broke the camel害羞草研究所檚 back.害羞草研究所�

The 2022 Joe Debtor study examined 2,700 personal insolvencies filed in Ontario. Hoyes Michalos says 49 per cent were filed by millennials aged 26 to 41, even though they make up 27 per cent of adult Canadians.

The study found that on a per-population basis, millennials were 1.4 times more likely to file for insolvency than people in generation X aged 42 to 56, and 1.7 times more likely than baby boomers aged 57 to 76.

Insolvent millennials were on average 33 years old and owed an average of $47,283 in unsecured debt.

Hoyes said many people collected CERB and other pandemic-relief funds without fully appreciating the tax liabilities those programs generated, finding themselves insolvent and unable to pay down their credit cards, student loans, high-interest loans, and lastly their tax debts.

More than 100,000 Canadians of all ages filed for bankruptcy or insolvency in 2022.

But older generations, Hoyes said, have enjoyed many advantages.

Housing prices were more in step with wages. Tuition fees didn害羞草研究所檛 necessitate student loans, allowing graduates to enter the workforce and start saving and investing out of the gate, rather than having to service large debts for years after completing their education.

Hoyes said those circumstances represented a 害羞草研究所渟afety valve害羞草研究所� that young people now can害羞草研究所檛 rely on.

害羞草研究所淎nything goes wrong like a pandemic, or you lose your job or you get sick or you get divorced and boom, there is no safety valve there,害羞草研究所� he said.

Filing for bankruptcy, he said, is an option to eliminate debts, but most people end up filing consumer proposals with the help of insolvency trustees like him to pay them down over time in manageable portions.

害羞草研究所淚t becomes an affordable way to eliminate the debt, and that害羞草研究所檚 why we害羞草研究所檙e seeing more and more millennials resorting to consumer proposals,害羞草研究所� he said. 害羞草研究所淭hey really have no other choice.害羞草研究所�

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Sandra Fry, a Winnipeg-based credit counsellor with the non-profit Credit Counselling Society, said many young people who seek alternatives to insolvency and bankruptcy are dealing with the shock of rising interest rates.

害羞草研究所淯nfortunately, a lot of people out there are living on the edge of their affordability,害羞草研究所� Fry said.

Fry said the Credit Counselling Society sees all types of people struggling financially with rising costs that are 害羞草研究所渞eally squeezing Canadians in general from all sides.害羞草研究所�

The society helps people struggling with debt, negotiating with creditors to eliminate interest on loans, but also refers people in some situations to bankruptcy and insolvency trustees.

Millennial clients she害羞草研究所檚 dealt with lately have often had variable interest rate mortgages, and rate hikes 害羞草研究所渃aused huge strain on their budget because their payments just went up like crazy.害羞草研究所�

Dave Locke, 31, lives with his wife in Coquitlam, B.C., east of Vancouver, and the couple sought Fry害羞草研究所檚 help when their mortgage payments jumped dramatically in the middle of a costly renovation.

Locke, who works for a real estate brokerage, got into the housing market at a young age having worked in the oil and gas industry after high school.

He ended up buying a home in Coquitlam with his wife Tara, who works in labour relations, and the Bank of Canada害羞草研究所檚 rate hikes eventually saw their monthly mortgage payments jump 40 per cent.

The couple had a construction loan with their bank to fund the renovations, and as interest rates climbed and the price of construction materials ballooned, Locke realized something had to give, even with their relatively high combined incomes.

Insolvency or bankruptcy weren害羞草研究所檛 options for the couple because they wanted to keep their assets, but the Credit Counselling Society was able to work out a deal with their bank to eliminate interest on the renovation loan.

害羞草研究所淚害羞草研究所檓 still paying the full balance,害羞草研究所� Locke said. 害羞草研究所淚害羞草研究所檓 just not paying any additional interest.害羞草研究所�

Locke said the stress and stigma of debt is embarrassing, 害羞草研究所渂ut it害羞草研究所檚 just the way it goes.害羞草研究所�

害羞草研究所淵ou have to kind of swallow your pride,害羞草研究所� he said.

Grant Bazian, a licensed insolvency trustee and president of MNP Ltd. in Vancouver, said he害羞草研究所檚 seen many clients 害羞草研究所渒eeping up with the Joneses,害羞草研究所� but living beyond their means and getting stuck in a cycle of high interest debt from payday loans and credit cards, layered on top of 害羞草研究所渞idiculous害羞草研究所� housing costs.

Bazian said there害羞草研究所檚 likely no 害羞草研究所渙ne magic bullet害羞草研究所� to alleviate the debt woes of young people, many of whom are coming to see him racked with anxiety and other mental health issues.

For accountant Hoyes back in Ontario, putting out the firm害羞草研究所檚 Joe Debtor study every year is a way of letting people know they害羞草研究所檙e not alone and to remind them of legal options to start anew financially.

Hoyes said it would be a mistake to automatically blame millennials for their money trouble because 害羞草研究所測ou cannot be blaming an entire generation for how the deck is stacked against them.害羞草研究所�

害羞草研究所淵ou don害羞草研究所檛 have to keep working two jobs for the next 20 years,害羞草研究所� he said. 害羞草研究所淭here are legal ways to eliminate a chunk of your debt, and yeah, it hurts your credit temporarily and it害羞草研究所檚 not something you want to do, but sometimes surgery is the answer.害羞草研究所�

Darryl Greer, The Canadian Press

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