More Canadians filed for bankruptcy in October

The number of Canadians filing for insolvency protection jumped in October as the global financial crisis sent more individuals into bankruptcy, according to national statistics released Thursday.

The Office of the Superintendent of Bankruptcy Canada, a department within Industry Canada, said almost 9,000 individual Canadians filed for bankruptcy in October, an increase of 22 per cent compared to the same month last year.

In that five-week period, 8,976 people slipped into insolvency compared to 7,304 individual bankruptcies for the same month one year earlier.

The story is the same when examining a long period.

For the 12 month period ending in October 2008, 86,911 men and women in this country asked for insolvency protection, up 8.8 per cent compared to the year between October 2006 and October 2007.

Business stays afloat

Businesses, however, appeared relatively immune to the bankruptcy bug despite the growing financial meltdown that has affected most countries.

In October, 496 Canadian firms declared bankruptcy, a slight drop from the figures from October 2007.

For the 12 months between October 2008 and October 2007, 6,174 companies closed their doors, again down marginally from the 12-month period between October '07 and October '06, when 6,348 firms declared bankruptcy.

The results might appear surprising given that companies have seen their valuations slashed and sales dry up as the global economic problems, which began in September, quickly accelerated.

For individuals, widespread layoffs have only begun to surface in the past couple of weeks.

Number of bankruptciesPeopleFirms October8,976496 September8,347 486 August6.977 469Source: Office of the Superintendent of Bankruptcy Canada

Still, the number of individual bankruptcies jumped as soon as the crisis began while business insolvencies stayed roughly the same.

For instance, the number of men and women slipping into bankruptcy in September reached 8,347, a rise of 20 per cent compared to August.

Meanwhile, the failure of U.S. investment house Lehman Brothers started a domino effect among other American financial institutions, causing many of those companies to lurch dangerously close to a similar fate.

Canadian companies, however, saw very little corresponding rise in insolvencies, 486 in September versus 469 in August.

Big provinces fare badly

Ontario, with 3,783 bankruptcies, and Quebec, with 2,934 business and individual insolvencies, had the highest totals among all Canadian provinces.

Prince Edward Island, at 70 per cent, and Newfoundland, 37 per cent, were the provinces with the fastest growth rates in bankruptcies in October.

Nova Scotia was another province with high growth in business and individual insolvencies, 17 per cent in October.