The Moral Verdict: What Canadians Really Think About Bankruptcy

Shawn Stack spent a decade as a Licensed Insolvency Trustee building a Calgary firm into a national practice. He gave away thousands of pens, one to each client who signed their insolvency documents, marking the moment a signature that had bound someone to debt became the one that set them free. When the pandemic digitized that process and the pens disappeared, so did the intimacy of the moment. The book, he says, was partly a response to that absence.

He left the firm in 2021 and has since turned his attention to the cultural and philosophical dimensions of the work, including a book, public tools around debt and identity, and most recently a national Angus Reid survey of 1,501 Canadians on debt, bankruptcy, and moral judgment. What he found was a country that condemns insolvency in the abstract and forgives it almost entirely up close, a thirty-point empathy gap that Stack argues reveals something worth paying attention to about how we have built a credit-dependent economy while preserving older attitudes about shame and financial failure.

We spoke with Stack about the data and what he thinks needs to change.

The empathy gap

According to the survey, roughly four in ten Canadians hold negative moral views of bankruptcy filers. Yet when asked whether they would view a close friend or family member differently after a filing, only one in five say yes.

Stack is not surprised, but he thinks it matters. "It's one thing to judge a stranger, but it's something completely different to pass that judgment on to someone you know. We tend to judge strangers ideologically and in the abstract, but the people close to us we judge situationally."

The generational divide is notable too. Boomers and Gen Z are more than twenty-five points apart on whether bankruptcy constitutes a loophole, 47% versus 21%. For Stack, that reflects economic reality as much as attitude. Gen Z entered adulthood in a high-cost, low-stability economy where the relationship between effort, debt, and outcome looks quite different than it did for earlier generations. "It's this fear of being judged that tends to keep people trapped in lives of despair," he says.

The punishment paradox

Only one statement commanded majority agreement across every demographic: 51% of Canadians believe bankrupts should have limited access to future borrowing, a position that asks the system to penalize people for using the system.

Stack traces this to a straightforward contradiction. "This really has to do with the cognitive dissonance of bankruptcy being a sound legal remedy, and yet somehow still being viewed as an immoral action," he says. "44% of Canadians recognize bankruptcy laws as a legitimate financial decision, and yet 37% consider non-payers as untrustworthy, a moral judgment on the same legal remedy."

Material Salvationism

Stack's book introduces a concept he calls Material Salvationism: the idea that happiness and social value are achievable through material acquisition, and that financial success is appropriately tied to identity and worth. The result, he says, is that insolvency becomes not just a financial event but something that feels like a personal failing.

"Our identity is defined by what we project to the world through our consumptive lifestyle and appearance, which is often funded through consumer credit. Today's identity is being funded by tomorrow's earnings, with interest." When the debt becomes unsustainable, he says, the result is isolating and compounded by the absence of any shared language for discussing it.

His goal, he says, is larger than a book or a survey. "I am trying to usher in a new morality. One that sees insolvency not as moral failure, but as rebirth. We are not the product of our past, we are the producer of our future."

Asked what single thing he would change about how Canadians think about insolvency, his answer is simple: "Insolvency is not a moral state, it is a financial one. And everyone deserves to treat themselves like someone worth saving."

Part Two of Stack's national study, examining how Canadians assess the role of lenders and institutions in driving financial hardship, is due for release later this month.