Personal Bankruptcy Filings on the Rise in Canada
Tap to Call - (877) 250-8242

Personal Bankruptcy Filings on the Rise in Canada

February 21, 2012

By

Share this article

SHARE

 

The Globe and Mail reports this week that analysts predict Canadian personal bankruptcy filings will increase slightly in 2012, following slight declines since the peak of the recession. The estimate comes at an interesting time for personal bankruptcy internationally: in the U.S., most states have reported consistent (if relatively small) decreases in personal bankruptcy filings over the last several months.

But in Canada, many of the economic problems that continue to plague the U.S. (including unemployment, under-employment, and weak job growth) could lead to an uptick in personal bankruptcy petitions this year.

Analysts are blaming the predicted growth in bankruptcy on an increase in low-wage jobs and economic conditions that are forcing people to work in less-than-ideal situations (e.g. on a contract or part-time basis). Canada’s bankruptcy courts will likely also be affected by decreases in public-sector employment predicted for 2012, according to sources.

Bankruptcy Alternatives Popular in Canada

Despite the slight bump predicted for the coming months, Canadian personal bankruptcy rates are apparently the lowest they’ve been in nearly 20 years. One potential factor contributing to the two-decade decrease is the Canadian bankruptcy alternative called a "Consumer Proposal."

Proposals allow Canadian debtors an avenue through which they can work out alternate debt-repayment terms with their creditors. Unlike the debt negotiation or debt settlement practiced in the United States, Canadian Proposals are regulated by the Canadian Bankruptcy Courts and are designed as legally binding documents.

In the time period that has seen Canadian bankruptcy petitions drop, Consumer Proposals (also called a "Proposal to Creditors" or "Personal Proposal") have increased significantly. In Canada, the proposal system outlines specific qualifications regarding debt and income that candidates must meet in order to qualify for the benefits of a proposal.

Canadians also have the non-bankruptcy option of a Debt Management Plan available to them. Essentially the same as the sort of budget and repayment plan an American debtor might get from a credit counselor, Debt Management Plans are not considered legally binding.

Koreans Seeing Personal Bankruptcy Surge

Even as bankruptcy statistics hint (even weakly) at signs of recovery in the U.S., the figures in Korea paint a different picture. Reports this week from Korean newspaper The Chosunilbo indicate that personal bankruptcy filings in Korea have jumped precipitously over the last few months, as that country’s economy slips toward depression.


Back to Newspaper Home


Tap to Call - (877) 250-8242

Copyright © 2018 MH Sub I, LLC. All rights reserved. ® Self-help services may not be permitted in all states. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state.Your use of this website constitutes acceptance of the "Terms & Conditions", "Supplemental Terms", "Privacy Policy" and "Cookie Policy."