The Office of the Superintendent of Bankruptcy recently released the year to date statistics for bankruptcy and consumer proposals filings.
The good news for Windsor is that bankruptcy filings were down for the first 6 months of 2011 compared to 2010. 581 people filed for bankruptcy in the first 6 months of 2010 while 480 filed in the same period for 2011 for a decrease of 17%. There were 270 consumer proposals filed in the first 6 months of 2010 and 278 in the same period in 2011. 3% isn’t a huge increase, but it is still a good news story. How is that good news? A decrease in bankruptcy filings is good if it means the decrease is caused by people being able to manage their debt. Why? Since the bankruptcy rules changed in 2009, bankruptcy has become longer and more expensive for many people. Rather than having an expensive bankruptcy for up to 36 months, you can have a reasonable payment under a consumer proposal for a longer period of time. However, if you need help managing your debt it’s important that you speak with a licenced bankruptcy trustee. I am meeting with too many people who were attracted to the fancy ads of debt consultants and spent thousands of dollars in fees only to either be referred to a trustee to file a consumer proposal.
For the Windsor economy in general, a declining personal bankruptcy rate is good news. In order to make the consumer proposal someone needs to have a source of income, usually employment income or pension. An increase in consumer proposals shows that people are working, although still struggling with their debt. They can make some payment towards their debt, they just need help.
Unfortunately, the situation for Leamington is a mixed message. There were 32 fewer bankruptcy files, however there also 12 fewer proposal files. Does that mean that people who live in Leamington are less likely to have debt? I don’t think so. Debt levels are still at record levels and people need to pick up the phone and call if they need help with their debt.
For information on statistics for other areas, please see Bankruptcy Canada and Consumer Proposal Canada.
Hoyes Michalos is one of the largest filers of consumer proposals in Windsor and Leamington , so if you are interested in learning more about this increasingly popular option to bankruptcy, call me at 519-250-8060 in Windsor, 519-326-1467 in Leamington or email me to arrange a no charge consultation.
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