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Article

Abstract

The crisis created by the spread of COVID-19 seems likely to permanently change the structure of economic activity moving forward—more people are working from home, taking fewer business trips, and gravitating towards online spending. In the short-term, Canada has done well to provide temporary economic support to those temporarily or permanently affected by the virus. This unprecedented level of government support, together with the unparalleled level of voluntary creditor forbearance for late payments, has led to a remarkable drop in consumer bankruptcy filings in April and May 2020. However, a significant surge in the need for debt relief and bankruptcy filings is predicted for the near future. This article concerns the effect of COVID-19 on the household debt carried by Canadian families and on the debt relief measures that are available to them. How, if at all, will the socio-economic composition of those with serious debt problems change? Are the debt relief measures currently available through the Bankruptcy and Insolvency Act adequate to the task? What changes to the system of credit regulation might help those affected by the virus?

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This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

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