Recent reports have shown a marked decline in personal Bankruptcy rates across the country, despite an increasing debt load for the average individual. We take a closer look at the data to explain this situation, which may seem surprising – or even counter-intuitive – at first glance.
Debt Up, But Bankruptcy Down Across the Country
The numbers are in, and a recent report from the Office of the Superintendent of Bankruptcy (OSB) has shown a 5.8% decline in Bankruptcy filings in 2017, compared to the same timeframe, last year.
This drop in Bankruptcy may catch some off-guard, given the fact that Canadians are living with more household debt than ever before. But upon closer investigation, the explanation is a positive one: It suggests that Canadians are better informed about managing their debts, and are taking advantage of more appealing alternatives to Bankruptcy when the debt becomes insurmountable.
Consumer Proposals are a Preferred Alternative
According to the OSB report, the number of Consumer Proposals filed has increased by 2.6% from last year.
As many of our readers will know, a Consumer Proposal is often a preferred alternative to Bankruptcy. An offer is made to your creditors to pay back a manageable fraction of your debt, on a set repayment schedule. Once accepted, interest charges no longer accumulate, and creditors cease all collection actions, including late payment notices, phone calls, and wage garnishments.
In other words, each Consumer Proposal filed represents one more debtor who managed to avoid Bankruptcy, and provide a better outcome for creditors.
Awareness is Half the Battle
This shift away from Bankruptcy and towards less severe alternatives is exactly the reason why we provide outreach and education on our blog and social media platforms. And while we’re glad to hear that more Canadians are resolving their debt with alternatives to Bankruptcy, many people are still unaware that there are other options to consider. Regardless of which solution is best for you, it is important to keep in mind that there is life after debt, and you are not alone.
If you’re feeling overwhelmed by debt, please contact us for a free consultation with one of our experienced Licensed Insolvency Trustees. Together, we’ll look at alternatives to Bankruptcy, including credit counselling, debt consolidation, and Consumer Proposals. With offices in Toronto and Hamilton, the Fuller Landau Debt Solutions team can help you get a fresh start and lead a FULLER life. We also invite you to follow us on Facebook and LinkedIn to learn more about debt management solutions.