NB achieves biggest jump in personal bankruptcies in March |  CBC News

NB achieves biggest jump in personal bankruptcies in March | CBC News

New Brunswick recorded the highest monthly increase in insolvency filings by consumers in March, according to the latest statistics from the Bankruptcy Supervisor’s Office.

There were 317 bankruptcies and consumer proposals in the county that month, compared to 213 in February — a jump of 48.8 percent.

The average increase across the country was 24 percent.

For more context, the provinces with the closest population size, Nova Scotia, Saskatchewan and Newfoundland and Labrador respectively had 293, 313 and 164 consumer bankruptcies in March. These represent monthly increases from February of 35 percent, 43.6 percent and 13.1 percent.

New Brunswick’s number was actually lower, however, than it was in the same period last year.

There were 328 consumer bankruptcies in the county in March 2021. This year 317 represented a 3.4 percent decrease.

Paul Moffett, a licensed insolvency trustee, who works for a global accounting firm called BDO Canada Limited, said “record trends” in insolvency filings began before the pandemic spread.

Then, during the pandemic, he said, people relied more on credit.

Now, inflation is outpacing wage increases.

Paul Moffett is a senior vice president at BDO Canada based in Moncton, overseeing financial recovery services in NB, PEI and Cape Breton, NS (BDO Canada)

Moffett said there are many ways to know when to speak with a debt professional.

“If you are losing sleep… you are constantly thinking of ‘How am I going to make these next payments?’” “… you only make minimum payments each month… using a credit card or other payment line of credit… exceeding your limits… these are clearly signs that something is wrong.”

When someone files for bankruptcy, Moffett said, they stop withholding wages, collection calls, and lawsuits.

“The purpose of bankruptcy is to give the unfortunate honest debtor the opportunity to get out of the crushing burden of debt,” he said.

It can be a huge relief. But it also comes with its own challenges.

Innovation, Science and Economic Development Canada explains on its website that what also happens in bankruptcy is that your assets are sold, that you pay as much as possible to the trustee for up to three years and your credit is affected for at least six years, making it difficult to make any major purchases.

Moffett said how long you’ve been in bankruptcy and how much it will cost in general depends on what assets you own, what you earned during your bankruptcy, and whether you’ve been bankrupt before.

Morning info – Fredericton8:52The high rate of bankruptcy cases in note:

High inflation has left many of us struggling to manage debt, and here in New Brunswick we are not doing well. Paul Moffett is a licensed insolvency trustee, and we talked to him about the nearly 50 percent rise in bankruptcies this spring.

“If you have minimal assets and your income has not exceeded a certain threshold and you have not been bankrupt before, it could only take nine months.”

In other cases it can be up to three years.

The first option that is explored when he meets someone is whether they can handle it on their own by “understating” them.

The second option is “consumer offer”.

According to the Canadian government, a consumer offer is where you give creditors a percentage of what they owe, extend the time you have to pay off debt, or both, for a maximum of five years.

“Sometimes we are able to settle the debt for as little as 20 per cent or less,” Moffett said.

The popularity of consumer propositions is increasing, he said, adding that they have some benefits over bankruptcy.

Debtors love them because they can make lower payments over a longer period — five years instead of three.

Creditors love it because they can often recover a larger portion of what is owed.

High real estate values ​​’a double-edged sword’

Another possible reason for its growing popularity may have to do with rising property prices.

Moffett said more people he sees who are facing potential bankruptcy these days have equity in their homes. This means that their home is worth more than what they owe in any mortgage.

He said stocks are a double-edged sword when it comes to bankruptcy.

It increases a person’s assets and the amount they are expected to pay to creditors, but it also gives a person more choices, such as a consumer offer.

He said that owning the stock may also give you the option of trying to remortgage your home.

When you file for bankruptcy, the house becomes the property of the property, for the benefit of your creditors.

Anyone can decide to sell their home and pay all their bills, but that’s not a very popular option, Moffett said.

He said it would likely direct you more toward a consumer proposition.

The Bankruptcy Supervisor’s Office reports that New Brunswick’s consumer bankruptcies for March 2022 are divided into 106 bankruptcies and 211 consumer offerings.

In the entire first quarter, there were 739 consumer bankruptcies in the county — 259 bankruptcies and 480 bids.

This is lower than during the same period last year – 802.

It’s an increase of about 12 percent from the last quarter of 2021 — when there were 660.

2022-05-30 21:25:03

Leave a Comment

Your email address will not be published.