The numbers are out; the Office of the Superintendent of Bankruptcy has just announced that the number of individuals who had to claim personal bankruptcy in Scarborough has gone down when compared to last year.
From January to June of this year, 723 people living in Scarborough filed personal bankruptcy. There were also 800 people who filed consumer proposals, for a total of 1,523 individuals who filed for protection in the first half of this calendar year. If this trend remains the same, we project that 3,046 residents of Scarborough will either file a bankruptcy or proposal this year. So how do these numbers compare to last year?
In 2009, 1,887 people went bankrupt in Scarborough, and 1,509 proposals were filed, for a total of 3,396 filings. That would indicate that we may see a drop of 10% in the number of insolvencies filed this year in Scarborough. This number compares to a 13% provincial wide projected decrease in filings.
For the economy in general, a reduction in the personal bankruptcy rate is good news. It means more people are working and are able to pay their debts.
What can we expect for the remainder of 2010?
It is my belief that bankruptcies will continue to decline in Scarborough for at least the next few months. There are no signs of interest rates rising, or unemployment numbers changing. If there is a dramatic change, the bankruptcy numbers could go up. Also, if consumer spending is negatively impacted by the new HST, we may also see higher bankruptcy rates.
One more important point to note: the good news is that more and more people in Scarborough are choosing to file a consumer proposal as an alternative to bankruptcy. In 2009, 44% of filings in Scarborough were proposals (the rest filed bankruptcy). This year, that percentage has increased to 53%. That’s a big jump. And it’s a good sign, as more people are choosing to negotiate a settlement with their creditors than file for bankruptcy.
If you would like some more information about filing a consumer proposal in Scarborough as an alternative to claiming bankruptcy, call me at 310-PLAN (310-7526, no area code required) or email me today to arrange a no charge initial consultation.
