For a time, residents of Manitoba had some of the lowest borrowing rates in Canada. The province even ranked number 10 for average consumer debt in 2017, being one of the lowest levels of debt per capita in the entire country. Manitoba also maintains the smallest growth in the number of residents enrolling in consumer proposals and other debt solutions. This apparently indicated a disinclination to take on new credit card debt, installment loans, and other forms of consumer indebtedness, thereby contributing to the overall economic health of the province. But Manitoba is slowly seeing an increase in insolvencies and other forms of debt.

An excessive amount of consumer debt, we must remember, is a threat to one’s long-term financial health even if the interest rate charged on it is relatively small. As debt increases, so does the likelihood of default. That is why so many Manitobans are turning to debt solutions like the consumer proposal.

Insolvency & Consumer Proposal Statistics in Manitoba

Nationwide
Q3 20 Q2 20 Q1 20 Q4 19 Q3 19 Q2 19 20 vs. 19
Insolvency 21,335 19,767 33,237 35,155 37,708 35,076 -19%
Proposal 13,668 12,903 22,032 21,884 21,161 20,976 -12.3%
Manitoba
Q3 20 Q2 20 Q1 20 Q4 19 Q3 19 Q2 19 20 vs. 19
Insolvency 567 597 803 846 790 833 -10.2%
Proposal 358 416 569 536 435 423 11.6%

Source: https://www.ic.gc.ca/

What Is a Manitoba Consumer Proposal?

To understand the consumer proposal, Manitoba residents must first know that it is a binding legal agreement between a debtor and his or her creditors. Under a consumer proposal, a debtor hires a licensed bankruptcy trustee to draw up a contract between borrowers and lenders that sets up a payment plan that will allow the borrower to eliminate his or her debt. What sets this plan apart from paying the minimum payments to your creditors on your own is the fact that a consumer proposal often includes freezing your interest payments and an agreement that your creditors will consider your debts paid in full for less than what you actually owe.

The consumer proposal is binding on all your creditors once creditors who hold a simple majority of your debt (51 percent) agree to it. If you neglect to follow the terms of your consumer proposal, you forfeit much of the protection and debt reduction that it provides.

Is a Manitoba Consumer Proposal Right for Me?

The answer to this question depends on a variety of factors. First, your total debt must be less than $250,000 ($500,000 for married couples). Second, you must demonstrate that you cannot make the minimum monthly payments on your bills.

Even if you meet the above requirements, you may not want to submit a consumer proposal to your creditors. Manitoba residents who fear the effects of bankruptcy, for example, experience the same harm (or close to the same) to their credit as a bankruptcy under a consumer proposal in Manitoba. On the other hand, a consumer proposal is superior to a bankruptcy in that it protects your assets from seizure. Another advantage of a consumer proposal is that your bankruptcy trustee is often able to negotiate greater principal and interest reductions than you could on your own. However, a Canadian debt settlement program can often get the same or better reductions for you without such a severe impact on your credit that you suffer under a consumer proposal.

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This has only been a short overview of the consumer proposal and its advantages and disadvantages. To receive more information, fill out the online debt relief form and learn more about other debt solutions.

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Annual Consumer Insolvency Rates in Manitoba

(Per 1,000 Population Aged 18 Years and Older)

Manitoba
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Insolvency 3.0 2.4 2.0 2.0 2.0 2.2 2.7 2.7 2.9 3.2
Proposal 0.8 0.7 0.7 0.7 0.7 0.9 1.2 1.3 1.5 1.8
Southeast
Insolvency 2.5 1.7 1.6 1.9 1.5 1.9 2.0 2.5 2.5 2.7
Proposal 0.6 0.3 0.5 0.6 0.5 0.5 0.9 0.9 1.3 1.4
Southwest
Insolvency 4.1 3.2 2.4 2.8 3.0 3.4 3.7 3.5 3.4 4.1
Proposal 1.4 1.3 0.9 1.3 1.5 1.8 2.0 1.9 1.8 2.5
Winnipeg
Insolvency 3.1 2.5 2.2 2.0 2.0 2.3 2.9 2.8 3.1 3.3
Proposal 0.7 0.7 0.7 0.7 0.7 0.9 1.2 1.4 1.6 2.0
Interlake
Insolvency 1.9 1.6 1.4 1.4 1.4 1.4 1.9 1.8 2.1 2.6
Proposal 0.3 0.4 0.4 0.5 0.5 0.5 0.8 0.7 0.9 1.4
Parklands and North
Insolvency 3.0 2.7 2.3 2.0 2.3 2.8 2.9 2.6 2.5 2.6
Proposal 0.9 1.1 0.9 0.7 1.0 1.3 1.2 1.3 1.3 1.4
South Central*
Insolvency 2.6 2.0 1.5 1.4
Proposal 0.4 0.5 0.3 0.4
North Central*
Insolvency 2.3 1.6 1.4 1.7
Proposal 0.8 0.5 0.5 0.5
South Central and North Central*
Insolvency 1.9 1.5 2.3 2.1 2.2 2.4
Proposal 0.6 0.5 0.8 1.0 1.1 1.3

Source: https://www.ic.gc.ca/
* In 2014, Statistics Canada’s Labour Force Survey combined the following economic regions (ERs): South Central and North Central.

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