Are the causes of financial distress a determinant of choice of proposal or bankruptcy?
It does not appear from the data that the causes of bankruptcy, for the most part, are a determinant of choice of proposal or bankruptcy, although in particular instances, some debts may drive choices in one direction. The data above allow for some preliminary observations across data sets. In terms of causes of insolvency, the top four causes are summarized for each cohort: Division II Consumer Proposal • 25% money mismanagement • 20% overextension of credit • 14% seasonal employment/insufficient income • 12% job loss Division II Individual Business Proposals • 24% overextension of credit • 16% money mismanagement • 17% job loss • 16% seasonal employment/insufficient income Division I Proposal • 20% overextension of credit • 16% failed business • 14% money mismanagement • 12% failure to pay taxes Bankruptcy • 22% overextension of credit • 15% seasonal employment/insufficient income • 13% job loss • 11% medical reasons The data indicate that overextension of credit is a primary cause o
