Increasing Insolvencies: CERB Tax Debt to Blame?

A new study reports that Millennials have been dealt a raw hand recent economic changes, that have landed them under water with high student loan debt, credit card debt, demand loan debt and the CERB repayment, which has pushed many over the edge into insolvency. 

As reported by the CBC on March 26, 2023, 2700 personal insolvencies in Ontario, analyzed in a 2022 Hoyes Michalos study found that 49% were filed by millennials aged 26 to 41.  Noteworthy:  this cohort is 27% of adult Canadians.  On a per-population basis Millennials were:

• 1.4 times more likely to file for insolvency than in generation X aged 42 to 56
• 1.7 times more likely than baby boomers aged 57 to 76 to file for insolvency.

Insolvent millennials were on average 33 years old and owed an average of $47,283 in unsecured debt.

According to Doug Hoyes, Co-founder, Hoyes, Michalos & Associates Inc.,"The CERB was the final straw that broke the camel's back."

What can tax and financial advisors do to help?  First adjust prior filed returns the added CERB to income.  This will generate a refund that can help re-establish financial footing. 

Then discuss options for financial planning going forward including budgeting, saving and spending with the current fiscal environment in mind.  For assistance, cover this CE Savvy PD Collection in regular one-on-one meetings with the client.