Canadians are filing for multiple bankruptcies and it’s costing everyone

One of which is Kenneth Nantel. Nantel has been cleared of over $100,000 in debt in the past 10 years. He also does not appear to be concerned with the multiple bankruptcies.

After filing for the fourth time, Nantel’s application was finally denied by the judge overseeing his case.

In 2012 his judge wrote, “He’s shown no reluctance of using bankruptcy to be freed from his debts,” and added, “His past conduct demonstrates a contempt for the rights of his creditors.”

Nantel, who is a mechanic, later took his case to another registrar and was relieved of his debt obligations. He was successful in declaring bankruptcy for a fifth time eight days later after he had acquired another $37,000 in debts.

An investigation by La Press and Toronto Star has found that Nantel is not the only Canadian taking advantage of the bankruptcy system.

The investigations data analysis showed that in 2018, one in five Canadians were filing for bankruptcy for at least their second time. The data which came from the Office of the Superintendent of Bankruptcy shows that 11,500 Canadians filed for their second to fifth time.

20 Canadians filed for bankruptcy for the fifth time last year.

According to the Office of the Superintendent of Bankruptcy Canada, from 2011 to 2018 the number of consumer bankruptcies per year has fallen from 77,993 to 55,091, totalling 523,389. Fifth-time bankruptcies have risen from 5 to 20, totalling 88.

Thomas Telfer, who is a Western University law professor, said, “One fifth-time bankrupt is probably one too many,” he also noted, “It shows that the bankrupt has not received the message.”

Though numerous people who have filed for multiple bankruptcies have legitimate reasons for doing so, others have taken advantage and used the system as what has been referred to as a “fiscal car wash.”

Retired Canadian senator and current lawyer, Yoine Goldstein, said, “In some segments of society, it’s become almost a game. People take advantage of the system and they take advantage of the leniency of the registrars.” he also noted, “Society is bearing the cost of repeat bankruptcies.”

Due to the taxes that have been unpaid because of bankruptcies, credit card lenders have had to increase their interest rate in order to make up the cost. These rates are also being paid by customers who have always paid their debts in the past.

According to the investigation, many of the multiple bankruptcies have taken place in greater Quebec. They also found that it can be easier to file a successful bankruptcy when it is the fourth or fifth time compared to the second.

Though the overall number of bankruptcies has been steadily declining, repeat bankruptcies have been climbing.

According to federal data, only 21 of 395 discharges of fourth and fifth-time bankruptcy applicants were refused.