TORONTO, Nov. 23 /CNW/ - The Office of the Superintendent of Bankruptcy reports that the number of consumer bankruptcies and consumer proposals totaled 148,378 in the year ended September 30, 2009, an increase of 36.4% from the same period last year.
"For the last few years the insolvency rate has hovered around 100,000 per year, so to approach 150,000 is a massive increase," says Ted Michalos of Hoyes, Michalos & Associates Inc.
"More troubling is that the rate of increase is accelerating rapidly," says Douglas Hoyes, co-founder of Hoyes, Michalos & Associates Inc., one of Ontario's largest personal bankruptcy trustees firms.
Over the last twelve months personal bankruptcies in Canada have increased by 36%. In the last three months they are up by 41%. In the last month they are up by 47%. Those ever-increasing numbers show that the financial problems of many Canadians are getting worse, not better.
Unemployment remains high, personal incomes are not increasing, and the average Canadian is carrying a record household debt to income ratio of 140%, leading to an inevitable increase in personal bankruptcies.
The massive spike in personal bankruptcies in September was made worse by new, more punitive, bankruptcy rules that came into force on September 18, 2009. "Many Canadians rushed to file bankruptcy in the weeks prior to September 18 to take advantage of the old rules," comments Ted Michalos. "In fact, our filing volume on September 17 was three times our normal level, so the spike in September is not unexpected."
The new rules increase the amount of payments required by some bankrupts, and the length of a bankruptcy has increased by twelve months in many cases, increasing the cost of many bankruptcies.
"Our phone has not stopped ringing, so we expect bankruptcy levels to remain high," comments Douglas Hoyes. "However, we do expect an increase in the percentage of consumer proposals filed as Canadians attempt to avoid the punitive aspects of bankruptcy."
Historically about 21% of consumer filings were proposals. "We predict that number will increase to 25% or more in the coming years," says Michalos.
"The recession isn't over, so now is the time for people to try to reduce their debt and develop a plan to deal with their financial problems," concludes Hoyes.
Hoyes, Michalos & Associates Inc., a trustee in bankruptcy firm with offices throughout Ontario, helps people in financial difficulty. Further information and helpful links can be found at http://www.hoyes.com/press.htm.
SOURCE Hoyes, Michalos & Associates Inc.
For further information: For further information: Douglas Hoyes, CA, Trustee in Bankruptcy, firstname.lastname@example.org, Direct Line: (519) 568-4020; Ted Michalos, CA, Trustee in Bankruptcy, email@example.com, 310-PLAN (310-7526, no area code required in Ontario) or 1-866-747-0660