Bankruptcies are falling despite rising debt levels in Canada.
Consumer bankruptcies fell by 4.3 per cent in 2006, the first decline since 2002 and the largest decline since 1998, according to the office of the bankruptcy superintendent.
In Ontario, consumer filings declined by 2.1 per cent.
The declining bankruptcy rate in the face of the increasing debtload is largely due to a strong labour market, say bankruptcy trustees.
The unemployment rate in Canada declined for the fourth consecutive year to 6.3 per cent, and is now at a 30-year low.
The tight labour market also helped median hourly wages rise by 2.6 per cent in 2006.
These factors, combined with low interest rates, are making higher debtloads manageable for the "average" Canadian.
Household debt has continued to rise, up 9.8 per cent in the first 10 months of 2006.
Rising debt levels mean more Canadians are only one or two missed paycheques away from financial disaster, notes Hoyes, Michalos & Associates Inc., a trustee in bankruptcy firm.
