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2010: Bad Bankruptcy Statistics Come in Threes
Ted Michalos, Guelph Bankruptcy Trustee
2008 is when the current financial mess stated to affect the general population. I remember that immediately following Labour Day our phones started ringing off the hook and the number of people coming into our offices jumped by 50%.
2009 may very well be a year that most people want to forget. Our office continued to be inundated with calls and by the end of the year overall bankruptcy filings were up more than 36% over the previous year.
If you consider 2008 and 2009 the first two bad things, well then 2010 is likely going to provide the third.
From a statistical standpoint, it appears that we have crested the wave. Personal bankruptcy filings have shown slight decreases in the last few months of 2009. This statistic is deceptive. Since they are showing year over year decreases when compared to 2009 (a year of record bankruptcy filings). If you go back to 2007, the last year before the financial storm hit, we are still experiencing increases of more than 40%.
The bad news is likely to continue…
As financial professionals, what we find most interesting (frustrating for individuals) is that interest rates are at historic lows. If people could consolidate or refinance at these lower rates then a significant portion of the people coming through our doors wouldn’t have to. Unfortunately, these options just aren’t available for the average person. For whatever reason (and they are complicated), the lenders seem to prefer to have accounts written off, as opposed to recovering their money at lower rate of return.
We have had more calls in the first half of January this year than we did last year – a good indication that people will continue to file personal bankruptcy at historically high levels for the forseeable future.
If you are one of the many residents of Guelph suffering through the recession and you have more debt than you can handle, call my Guelph office at 310-PLAN, or e-mail me to set up a no charge initial consultation.