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Bankruptcies continue to decline on a monthly basis in Canada as the recovery solidifies.

Total insolvencies - which include bankruptcies and proposals among businesses and consumers - fell 11.1 per cent in December from a month earlier, the Office of the Superintendent of Bankruptcy Canada said Wednesday.

Bankruptcies fell 8.6 per cent and proposals tumbled 16.6 per cent. A proposal is an offer to creditors to settle debts under conditions other than the existing terms.

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Consumer bankruptcies, which soared for much of last year, fell 8.7 per cent after registered a 3.8-per-cent drop in November. Business bankruptcies fell 7.1 per cent, after an 7.7-per-cent slide in October.

Insolvencies have been declining on a monthly basis as the labour market stabilized and the economy returned to growth in the fall. They are still higher than year-earlier levels though, with total insolvencies 7.2 per cent higher than in December, 2008.

Consumers, rather than businesses, did most of last year's filing. Consumer insolvencies increased 8.5 per cent in December from a year earlier, while business insolvencies fell 15.7 per cent.

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Tavia Grant has worked at The Globe and Mail since early 2005, covering topics from employment and currency markets to trade, microfinance and Latin American economies. She previously worked for Bloomberg News in Toronto and Zurich, writing on mining, stocks, currencies and secret Swiss bank accounts. More

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