Industry Canada reported on Wednesday that 201 households across the region filed for bankruptcy in October. That's up by 7.5 per cent from 187 in September and 8.65 per cent from 185 in October of last year.
On the year to date, consumer bankruptcies are ahead of last year by more than 18 per cent, to 1,703 from 1,440.
The increase has come despite strong job growth in Ottawa in sectors such as government, construction, education and healthcare. The local economy is strong and disposable income is up.
But some sectors of the local economy continue to languish, such as high-tech, with thousands of people still unemployed and struggling to make ends meet.
While consumer spending may be good for the economy, many people often find themselves in over the heads. Interest rates remain low and debt vehicles such as lines of credit and credit cards are easier than ever to obtain. Cheered by an optimistic outlook for the future, many people will open up their purse strings and allow their spending to get out of control.
Such were the findings of a report that was also released on Wednesday by Nova Scotia.
Citing a survey carried out on its behalf by Ipsos-Reid, the bank said that, on average, household debt has climbed by 18 per cent over the last four years.
In dollar terms that means the average household now carries about $66,900 in debt, compared to $56,700 in 1999.
The survey also found that many Canadians intend to continue using credit at the same level, even though they acknowledge that their spending habits would leave them in a sticky situation if they lost their job.
About 50 per cent of respondents to the survey said they would have "great difficulty" paying down their debt if someone in their household lost their job.
"Given what we've seen in this poll, my advice to Canadians would be to recognize that, while low interest rates create an opportunity to borrow at a lower cost, it is advisable to manage your debt during these times," Scotiabank VP Alberta Cefis said in the report.
About 71 per cent of respondents said they will attempt to pay down their debt over the next year.
However, about 55 per cent said they would use the same amount of credit over the next five years, while 13 per cent expect to use more.
Despite such a widespread use of credit, 62 per cent of respondents acknowledged that the idea of being in debt frightened them.
The poll was carried out in October and surveyed a randomly selected sample of 1,000 adult Canadians.
