Number of Quebec families declaring bankruptcy on the rise

More than 34,000 Quebec households filed for insolvencies, which includes bankruptcies, from June 2024 to May 2025, according to the Office of the Superintendent of Bankruptcy (OSB).

That’s equivalent to 94 families in financial distress every day. This represents a 4.7 per cent increase — or 1,546 more cases — from the same time period last year.

While this number is slightly lower than the national average, Quebec consumers outrank other provinces with the increase of bankruptcies filed in the past year.

According to the OSB, for the 12-month period ending this May 31, a total 10,602 bankruptcies were filed by consumers in Quebec — up from 9,773 bankruptcies reported during the preceding 12 months. The number of bankruptcies filed by Quebec consumers last year increased by 8.5 per cent, higher than the nationwide five per cent increase reported for the same period.

These figures are a cause for concern for Benjamin Croitoru, a finance professor at McGill University.

“Everybody makes mistakes financially. I mean, I’ve made mistakes,” said Croitoru, who is also the academic director of McGill Personal Finance Essentials, a free online financial course. “And I think people face a system that is kind of rigged against them. You know, yes, people make mistakes, but because, well, there’s a lot of marketing that’s thrown at people to encourage them to spend too much money, to borrow money the wrong way.

“A lot of people overuse credit cards, of course, because they’re so convenient, but the cost of borrowing money with your credit card is staggering.”

Croitoru points to several other factors contributing to the rise in bankruptcies: a worsening financial climate year after year, including higher interest rates; economic uncertainty, which can lead to job layoffs; and a lifestyle fed by social media and influencers, leading to “more and more temptation to spend money.”

Croitoru urges awareness for consumers during periods of financial uncertainty.

“It’s those bad financial habits that people have,” he said. “And again, it’s not necessarily their fault. It’s really the system that encourages them to behave in a way that might be damaging to their finances.”

He warns that managing money can be an unforgiving game, where financial mistakes are hard to recover from.  He also acknowledges that sometimes bad luck is a factor.

Budget, make small changes

Croitoru’s number one piece of advice is learning personal finance basics and focusing on small changes.

“Some small changes, when you compound them over time, they can have an impact in the long term that’s surprisingly large that could really spare you some serious financial trouble,” he said. “I’m convinced that in some cases, (insolvencies) could be avoided.”

The finance professor’s advice for individuals who are near bankruptcy is to focus on what their specific debt looks like.

“People should know that if you take different ways that are available to borrow money, well, the cost, the interest rate might be very different,” said Croitoru. “Give priority to forms of borrowing that are more reasonable cost-wise.

“And once you have a budget, it might look great on paper, but can you stick to it in practice? Look at your expenses in the last few weeks, scrutinize them, and try to think maybe of a few things that you might be able to cut.”

‘Never ending’ loop of interest

CityNews spoke to some Montrealers who weren’t surprised by Quebec’s rising insolvency rate. Many said they had no choice but to borrow money to keep up with the rising cost of living.

“And it’s just very frustrating for me to see that this is what my generation has to deal with,” said one Montrealer, speaking of friends who were applying to dozens of jobs. “How are they supposed to get rid of the debt that they’ve accumulated to be able to study and learn all these things that they can’t even get a job there.”

“It’s not surprising at all,” said another passerby on Saint-Catherine street about the rising number of insolvencies in the province. “Barely anyone pays for anything in cash nowadays, so they all rely on the system that basically keeps them in the loop of paying interest and just never ending that basically.  More apps like Klarna … even the day-to-day needs are being paid by installments, which is one of the reasons why this is happening as well.”