The number of Canadians filing for bankruptcy and unemployment benefits rose significantly in January, according to new numbers released Tuesday by The Office of the Superintendent of Bankruptcy Canada.

More than 117,000 Canadians filed for bankruptcy over the period of twelve months ending January 2009. This denotes an increase of 15.8 % from the previous year. Nationally, the number of Canadians who filed for EI increased to more than 500,000 for January, according to Statistics Canada. Our unemployed Canadians filing for financial help is now 23% higher than it was in February of 2008.

Both the rapidly increasing bankruptcies and EI claims are signs of escalating troubles faced by Canadian citizens as the recession here deepens. And it’s not just individuals facing worry, but businesses as well.

In January of this year, 567 firms pulled the plug on their operations and filed for bankruptcy. Ontario manufacturing bankruptcies also rose 24%. Business insolvencies rose severely in Quebec, where the recession is strongly hitting the province’s industrial sector. 250 companies closed their doors in January, up from 202 closures in December of 2008.

How can individuals cope with job loss? Apply for EI as quickly as possible. The process takes time to be finalized, so the sooner you do, the less you’ll have to dip into savings. If faced with having to pay high prices for prescription medication after losing benefits, programs such as Ontario’s Trillium Drug Program can help cover these expenses.

Businesses can look at cost cutting where feasible, look for opportunities to expand their services to stable or growing sectors, and seek financing from federal and provincial funding programs (such as SR&ED or CME SMART). Companies on the brink of bankruptcy can look at Turnarounds and seek assistance from an experienced professional.

Source: Statistics Canada