Holiday spending drives up household debt

File photo — A Visa card is displayed in a wallet on Wednesday, May 15, 2024, in Portland, Ore. THE CANADIAN PRESS/AP/Jenny Kane

Gifts, grocery bills and travel expenses: holiday-season spending can bring surprises, and headaches, for Quebec households when credit card statements arrive in January.

The start of the year is also a busy time for licensed insolvency trustees, according to statistics compiled by the Office of the Superintendent of Bankruptcy Canada.

In January 2025, the number of consumer insolvency filings rose 20 per cent across Canada compared with the previous month.

In Quebec, 2,986 insolvency files were submitted in January 2025, compared with 2,087 in December 2024 — an increase of 43.1 per cent.

“Insolvency files are cyclical. There are always moments during the year when there will be more insolvencies, more files being submitted,” said Charles-Antoine Gobeil, president of Gobeil Groupe Conseil and a licensed insolvency trustee.

For example, in September, with the return to work and back-to-school spending, households are more likely to face “unexpected” expenses, he said.

The return from the holidays is also one of those moments when spending often exceeds a household’s ability to repay.

“People take time off, people spend — maybe a little too much — on Christmas gifts (…) December is quieter for us, but in January people come to see us because, well, they might have pushed things a little too far during the holidays,” Gobeil said.

Sooner rather than later

Deciding to consult a debt-resolution specialist is never easy. “Often people come reluctantly because it can be embarrassing to talk about your personal finances, especially when things aren’t going the way you want,” Gobeil said.

“What happens is that people unfortunately wait too long before asking for help,” he added.

There are several options to deal with debt, but the more time passes, the fewer solutions are available.

For example, “when the total amount of debt becomes too high, it can prevent debtors from getting a consolidation loan to group their debts.”

“At that point, the only option left might be either a consumer proposal through a trustee or a bankruptcy,” Gobeil said.

“But the thing to know is that no one ever regrets consulting a trustee,” he said.

He noted that in Quebec, the first consultation with a licensed insolvency trustee is free and comes with no fees unless an agreement is reached.

According to Gobeil, one of the early warning signs that a person is accumulating debt faster than they can repay it is when they are no longer able to make minimum payments on their credit card.

“Ideally, a credit card should always be a tool, for example for online purchases, so people should pay their card in full,” the insolvency advisor said.

That said, this seemingly basic task is becoming increasingly difficult for Canadian households, as their debt continues to rise faster than their income.

According to the most recent Statistics Canada report on the national debt ratio, household debt amounted to $1.77 in credit-market debt for every dollar of disposable income. Gobeil said “this financial pressure could intensify” in 2026.

“There was a drop in insolvency files during the pandemic, but for a few years now the increase has resumed. The number of files is now higher than what we saw before Covid,” Gobeil said.

He attributes this rise in household debt to the rising cost of living, but also to “the ease of access to credit.”

“We live in a society where credit is so easy to obtain and, at the same time, there’s very little financial education in that area,” he said.

Avoiding online traps

Gobeil warns debtors seeking a quick fix that they could fall into the hands of “fraudulent” online advisors.

“There are advisors who don’t have a trustee licence but will pretend to be insolvency advisors,” he said.

These advisors charge clients between $2,000 and $5,000 with the promise of negotiating agreements that could cut debts in half.

“In some cases, that’s true, but they’ll eventually have to go through a trustee to do it,” Gobeil said. “So they become intermediaries who take a commission before sending a file to a trustee, when the person could have gone straight to a trustee from the start and avoided the extra fees.”

Under the Bankruptcy and Insolvency Act, only those holding a licence issued by the Office of the Superintendent of Bankruptcy can administer insolvency files.

A list of all active trustees is available on the office’s website.

By Samira Ait Kaci Ali

This report by The Canadian Press was first published in French on Dec. 28, 2025.