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The crisis of high gas prices, will it lead to more personal bankruptcy in the GTA?
We have all seen gas prices reach record levels over the past few weeks in the GTA. What does this mean for the number of bankruptcies that will be filed? The answer is they are going to go up. Transportation costs are a basic need, just like housing and food; there is no avoiding it. When the price of gas goes up but our wages remain the same, there is no choice; we simply have less money to spend on other things. If people cannot adjust their monthly budgets, they will find themselves in financial trouble. And what makes the problem worse is that most people pay by swiping their card at the pump because it is convenient. It is not until they get their credit card bill at the end of the month that they see how much they are really spending.Many people made the choice in the past to move to the suburbs where housing was more affordable and they could commute to work. Now, many of these people are finding out that the costs savings have been wiped out by the higher transportation costs. It may even cost them more to commute than what they are saving by living in a less expensive home. If they looked at the numbers now, it may make more sense to pay for the higher cost of real estate in the GTA, but be able to take public transit to work, or better yet, cycle or walk.
And the higher costs of transportation affect us in a lot of other ways. Pretty much everything you buy at the supermarket these days made its way there by a truck. The higher transportation costs are being passed on the end user.
You may think that these transportation costs issues are putting you in a hopeless situation. What you need to do is keep a close eye on your personal budget to avoid falling into debt. You may have to make some sacrifices, but you have to be realistic. If you are finding yourself in financial trouble, you should be calling (or e-mailing) us today at 310-PLAN (310-7526), no area code required, and arrange for a personal meeting so that I can review your finances and outline your options.
posted by Benny Mendlowitz, CA CIRP, Trustee @ 8:25 PM
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