Personal bankruptcy is a scary prospect. While it’s normal to feel alone, the statistics show that thousands of Canadians are qualifying for bankruptcy protection and going through with the process of declaring themselves bankrupt. The data is mixed, but there are some encouraging signs of progress.
Overall Bankruptcy Trends
On a macroeconomic level, the number of bankruptcies filed each year in Canada has been declining since a peak level of 152,000 in 2009. Improving worldwide economic conditions are probably the most significant reasons for the shift. However, one should not underestimate the impact that consumer education has on lowering of the bankruptcy rate. Studies show that many people who qualify for bankruptcy are instead choosing to file a consumer proposal after learning about it as a debt relief option. That is good news for the overall economy because the impact on one’s credit is not as severe in a consumer proposal, and people can get out of debt and start borrowing and spending again much sooner with a consumer proposal than they can with bankruptcy. In this, we see one of the major advantages of the consumer proposal over bankruptcy protection.
Specific Year-over-Year Data
As this chart illustrates, the downward trend of bankruptcy filings continued between 2012 and 2013. Overall, the number of bankruptcy filings declined nearly 10 percent, which is great news for anyone who is concerned about debt and the willingness of many consumers to take on more debt than they can afford.
|Province||Q1 2013 Total Bankruptcies||Percentage Increase from Q1 2012|
|Newfoundland and Labrador||402||1%|
|Prince Edward Island||128||-10.7%|
Don’t Become a Statistic
Even though the number of bankruptcies is declining, you want to do all that you can to make sure that you are not counted in the number of insolvency filings in the years ahead. The key to this effort is making sure that you act proactively against any debt problems that you might have before they spin out of control. In recent years, the tendency has been for people to increase their debt at a faster rate than the economy is growing, which increases the risk of some event causing bankruptcy. You might be managing things just fine until an unfortunate event interferes with your finances and causes you to go bankrupt.
Don’t wait until it is too late and bankruptcy is your only choice. If you are already struggling financially, do what you can to take care of things now. There are many other debt relief options such as debt settlement and credit counselling that can help you get out of debt before it crushes you. Consider such options to get your spending and debt levels under control today before you are so deeply in debt that bankruptcy is your only option.
Help IS Available
Bankruptcy should always be your last option, and it’s important to understand ALL of the debt relief options available. A professional adviser can explain everything to you and look at your specific situation to help you decide what will work best. Fill out the Canadian debt relief form and get started today.