Fewer Canadians filed for bankruptcy in 2006 as low unemployment allowed consumers to cope with higher debt levels, according to the Office of the Superintendent of Bankruptcy.

Personal bankruptcies fell 6.4 per cent to 79,218 last year. Federal officials credited the "good performance" of the Canadian jobs market, noting that more than 300,000 jobs were created in 2006.

"This increase did more than soften the negative impact of rising interest rates and an increasing indebtedness rate," the bankruptcy office said in its annual review of insolvency figures.

Consumer Insolvencies - 2005/06
Region	2005	2006	Change (%)
Atlantic	10,326	9,479	-8.2
Quebec	27,351	28,997	+6.0
Ontario	40,687	39,936	-1.8
Man./Sask.	5,893	5,145	-12.7
Alberta	8,898	6,443	-27.6
B.C.	9,509	8,460	-11.0

The debt-to-income ratio reached 123.1 per cent in the third quarter of 2006. That means that Canadians owed $1,231 for every $1,000 in after-tax income.

However, the number of consumer proposals went up 6.7 per cent — from 18,022 to 19,232. A consumer proposal is one stop short of filing for bankruptcy. Under these scenarios, consumers who are struggling with large debts can propose that their creditors agree to accept less than what they're owed. Often, the creditors will agree if they'd end up with more than they would in a formal bankruptcy filing.

Insolvency filings showed several regional differences. Of the six regions tracked, only Quebec saw an increase in insolvencies (which includes personal bankruptcies and consumer proposals). Consumer insolvencies in Quebec rose by six per cent.

The biggest drop in consumer insolvencies came in Western Canada. In Alberta, consumer insolvencies fell by 27.6 per cent; in Manitoba/Saskatchewan, they dropped 12.7 per cent; while the number of consumer filings in British Columbia was 11 per cent lower than in 2005.   

Business bankruptcies across Canada also fell in 2006 — down 10.1 per cent from 2005 — to 6,756.