Canadians are struggling to pay off their debts, going bankrupt at a record-breaking rate.

The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) released its second quarter report on Friday.

According to the Office of the Superintendent of Bankruptcy (OSB), 35,082 Canadians filed consumer insolvencies in Q2, an increase of 12.4 per cent from the same quarter in 2023.

According to CAIRP, Canadian bankruptcies have reached a four-year high, reflecting mounting financial pressures on households due to high cost of living, debt servicing expenses and the lingering impacts of rapid inflation.

André Bolduc, a licensed insolvency trustee and chair of CAIRP, explained why more Canadians are going bankrupt.

"When individuals are forced to allocate more of their paycheque to groceries and other basic necessities, less remains for other obligations such as credit card bills or debt servicing," he said in a statement.

"This often results in missed debt repayments, using credit for daily expenses, receiving collection calls, and experiencing constant stress or losing sleep over financial worries — all of which are signs that an individual should seek professional debt help."

The report found that, on average, about 386 Canadians filed for insolvency each day in the second quarter of this year.

The last time the number of bankruptcy filings surpassed 35,000 in a single quarter was before the pandemic, in Q4 of 2019.

Bolduc says that while interest rates are going down, it might take some time before it impacts insolvency filings.

"Therefore, we expect insolvency activity to remain elevated as the recent rate cuts take time to positively affect Canadians' wallets and provide relief for household budgets," he explained.

The report also found that consumer insolvencies rose by 3.5 per cent in the second quarter compared to the first of 2024.

If you've found yourself going bankrupt this past quarter, Bolduc says not to take it "as a sign of defeat.

"The insolvency system in Canada is designed to be a rehabilitative process," said Bolduc.

"A licensed insolvency trustee will conduct a financial assessment, walk you through all the available debt relief options and advise on the best course of action. Should a consumer proposal or bankruptcy be the right option, they are the only debt professionals who are federally regulated and authorized to administer these important debt relief tools."

Licensed insolvency trustees are required by law to assess your financial situation fully and explain in detail all of your debt relief options.

They're also the only debt professionals who can offer legal protection from creditor actions and stop collection calls and wage garnishments, which is when your employer is required to give a portion of your wage to your creditor.

If you've gone bankrupt and need help digging yourself out of debt, you can find a government-regulated licensed insolvency trustee here.