By Jasmin Brown

BDO Debt Solutions

Increase in Insolvencies

May 18, 2021 | 9:26 AM

Interesting data has recently been released from the Office of the Superintendent of Bankruptcy indicating that the month of March 2021 marked the greatest single month increase in insolvency filings since prior to the COVID-19 pandemic. The increases are the highest we have seen in more than a decade. Saskatchewan is among the provinces with the most filings. For more than a year, industry experts have been anticipating a significant increase in insolvency filings, and it appears that this increase has now begun.

Affordability Concerns

The annual BDO Affordability Index has shown us that Canadians were struggling with the increasing cost of living prior to the pandemic. Many people were living paycheque-to-paycheque and struggling with things like putting food on the table, paying for household utilities, debt repayment etc. The pandemic has had the effect of widening the affordability gap even further, so it is not all that surprising that we are now seeing an increase in insolvencies.

People pushed through and did the best that they could, but many have now reached their tipping point. In some cases, the government benefits were able to provide people with the financial support that they needed, but in other cases, the benefits were insufficient to fill the gap. And in other cases, the taxable government benefits have created a tax debt after 2020 taxes have been assessed by Canada Revenue Agency.

Warning Signs of Financial Difficulty

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There are a number of “warning signs” that are an indication that you may be experiencing financial difficulty. Some of the things to look out for are:

· Receiving calls or letters from creditors or collection agencies;

· Having no savings;

· Spending all of your money prior to your next payday;

· Using one source of credit to pay another;

· Buying things impulsively and not considering needs vs. wants;

· Relying on your credit cards or other loans to pay for everyday living expenses;

· Failing to have a budget or a financial plan;

· Being rejected on consolidation loan applications;

· Struggling to make the minimum payments on your credit cards;

· Not knowing what your true monthly expenses are.

Learn Your Options

If you are struggling with your finances, or are finding yourself in any of the situations that are indicative of financial difficulty, it is time to re-evaluate your financial situation. It can be tough to take the first steps toward improving your financial situation, but it will be worth it in the end. After a free initial consultation with us, many people report feeling like they have had a weight lifted off their shoulders. Whether you feel like you need help now, or feel like you may need help in the future, it never hurts to learn your options. Speaking with a Licensed Insolvency Trustee will be beneficial. The initial consultation is free and confidential. There is no pressure and there is no obligation. It is an opportunity to gather information and understand the options available to you, in a judgment free environment.

If you are having trouble making ends meet each month, finding the right debt solution can help. Visit the BDO Debt Solutions website for more information about bankruptcy, or call 1 855 BDO DEBT to book a free, no obligation consultation.

Prince Albert and Area