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.

This dramatic increase in the number of consumer proposals and bankruptcy filings in Guelph
follows four years of relatively good results, as can be seen in the chart.

The unemployment rate rose to its highest level since 1997, with 5.7% of the Guelph work force out of work in 2007. Employment levels declined and the poor labour market resulted in fewer people looking for work, driving the participation rate to a 5 year low.
If the unemployment picture remains poor, the bankruptcy rate could increase again in Guelph in 2008 as well.

Despite these high numbers, there is hope. You don’t have to become a statistic. If you are thinking about filing bankruptcy in Guelph, call my Guelph Bankruptcy Office at 519-823-0330 or e-mail me a question. I can explain why people file bankruptcy in Guelph, but more importantly I can help you review your options and decide if bankruptcy is the correct solution for you and your family.

Over the last few months I have noticed a significant increase in the number of people calling our Bankruptcy Guelph information line (519-823-0330), and now I know why.

In statistics just released by the Office of the Superintendent of Bankruptcy, the number of Guelph residents filing personal bankruptcy increased from 126 in the first half of 2006 to 161 in the first six months of 2007.

That’s a 28% increase, and that’s the largest increase of any major city in Ontario.

Ted Michalos, Trustee

Also on the increase are consumer proposals, increasing by 5% in Guelph so far this year.

While it’s impossible to precisely explain this increase, since I file more bankruptcies and consumer proposals than any other trustee in Guelph, I believe I have a good idea why we are seeing such a large increase in bankruptcies in Guelph.

I am meeting with an ever increasing number of people who have either lost their jobs or had their overtime cut back, and that creates financial pressure. Many residents of Guelph are home owners, and with the increase in interest rates over the past year that has led to higher mortgage payments, which is also a problem for many people.

My job is to explain to you your options, and help you work out a plan to deal with your debts, so please give me a call in Guelph at 519-823-0330 or e-mail me if you’d like to discuss your financial situation. I would be pleased to help you develop a plan to deal with your debts, and give you a fresh start.