The Office of the Superintendent of Bankruptcy (“OSB”) regularly publishes statistics regarding the rate of bankruptcy and proposal filings both by province and for the country. The OSB has just released these statistics for June 2010 and as expected the rate of bankruptcies has dropped this year. For the three months ended in June, 2010 the number of consumer bankruptcy filings in Toronto dropped by almost 30% from the same period last year.
Has the doom and gloom of 2008 and 2009 passed? Is the worst behind us?
From my bankruptcy office here in Toronto at Yonge and Bloor, certainly the bankruptcy numbers have decreased this year. This was particularly evident from May to end of June. I attributed some of the slow down to the G20 Summit that was here in Toronto in June.
However, the implementation of the HST seems to be having an effect on peoples’ spending. There was a report late last week that it is believed the HST has impacted spending in Ontario and increased inflation.
It also appears that the US economy is not recovering as expected. House sales are down further than expected and unemployment remains high. The summary is the consumer’s confidence is low and this will impact spending. Thus the US may experience another recession or double dip as the experts refer to it. Given the US is our largest trading partner, it is hard to believe our economy will not be effected.
So we may not be out of the woods yet with respect to any recovery. It may be sometime before things are back on track and the result is there will be many ups and downs along the way. In Canada, we may not be affected as severely but we cannot be complacent. For the balance of 2010, I expect bankruptcies may decline but it maybe another thing for next year.
I would then say it is time to keep on top of our budgets and plan our spending wisely. It may be that you need to review your options for dealing with your debts and come up with a plan of action for the next 6 months to a year. One trend we are noting is many are not filing for bankruptcy but doing a consumer proposal whereby they are making a contract with their creditors to repay a portion of the debt.
We would be glad to meet with you to discuss all options including a consumer proposal an in our Toronto office of Hoyes Michalos & Associates, so please feel free to contact me via email or call us at 310-PLAN (310-7526, no area code required) to make an appointment for a free consultation.
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