Sands & Associates, BC’s largest firm of licensed trustees in bankruptcy and administrators of consumer proposals, has compiled region specific numbers from the Office of the Superintendent of Bankruptcy, indicating insolvency rates from seventeen major regions in BC. The data covers the 2011 to 2012 period, and is based on the growth or decrease of personal bankruptcy and consumer proposal filings within each region.
Sands & Associates’ analysis follows Equifax’s latest report on Consumer Credit Trends showing that Canadians continue to pile on debt, where BC consumers currently hold an average of $37,244 in non-mortgage debt, among the highest in the nation. Sands & Associates reports BC saw an overall drop in personal bankruptcy filings as an option of debt settlement, by 4.6 percent from 2011 to 2012. Interestingly, over the same time period, the overall number of consumer proposal filings as an option of debt consolidation rose by 16.06 percent in BC.
These numbers reflect the same trend as the previous years from 2010 to 2011, where bankruptcies decreased by 16.7 percent, and consumer proposal filings increased by 23.9 percent.
According to Sands & Associates, the top regions in BC who experienced a decrease in bankruptcy filings from 2011 to 2012, include:
- White Rock: -21.93%
- East Vancouver: -18.42%
- Burnaby: -16.15%
The top regions in BC who experienced a spike in consumer proposal filings from 2011 to 2012, include:
- White Rock: 48.72%
- New West / South Burnaby: 48.72%
- Langley: 31.97%
While bankruptcies continue to drop, the increase in consumer proposal rates indicate that consumer indebtedness is still very much a problem in the province, but that consumers are beginning to act on their debts sooner. Bankruptcies are often filed as a final resort to amend a financial situation, whereas consumer proposals can be filed early in the stage of insolvency, as a bargaining tool to pay back creditors an affordable amount.
Blair Mantin, VP of Sands & Associates shares, “There’s been a big push to build awareness around consumer debt in the province. As people become more educated on their options and on debt in general, it is leading them to take the initiative to act sooner.”
He adds, “We saw the same pattern last year, with consumer proposal filings becoming the preferred option for debt settlement. So although debt levels are still a concern for many, it seems that consumers are taking the initiative to proactively deal with their debt.”
Mantin predicts that with continued awareness, personal bankruptcy filings in BC will continue to see a decrease as consumers take control of their debts.