Heavily-Indebted Boomers Are Going Bankrupt

During the pandemic, a lot of attention has focused on young working Canadians, who have been disproportionately hit by job losses. The challenges faced by young people launching their careers is with attention but Canadians over 50 have also experienced higher job losses.

Those over 50 may receive less sympathy because many people assume they own a home and have a higher net worth, but this is not the case for all of them.

Many Canadians over 50 are increasingly ending up insolvent. According to a recent survey by Hoyes Michalos, people aged +50 have seen a rise in insolvencies since the start of the pandemic. In 2019, older Canadian represented 28 percent of insolvencies and this rose to 31 percent immediately after last year’s lockdowns

This comes at a time when ― thanks to emergency pandemic income support from the government ― the number of Canadians who filed for insolvency actually dropped by nearly 30 percent, according to the Office of the Superintendent of Bankruptcy.

So why are Canadians over 50 going bust? According to insolvency trustee Doug Hoyes, co-author of the report, they are the ones carrying the most debt ― and the least likely to have had their living costs covered by the $2,000-a-month Canada Emergency Response Benefit (CERB).

For younger, lower-income earners, CERB payments often covered their lost income, but for older earners with higher income and higher expenses, CERB might not cut it, Hoyes said.

And a stark new divide is also forming between homeowners and non-homeowners, with those who own homes shielded from financial problems by rapidly rising house prices, he said.

Six or seven years ago, 33 percent of the clients at Hoyes’ insolvency firm were homeowners; today, that has dropped to less than 5 percent.

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