Bankruptcy watchdog issues debt warning - Action News
Home WebMail Wednesday, November 13, 2024, 06:54 AM | Calgary | -0.3°C | Regions Advertise Login | Our platform is in maintenance mode. Some URLs may not be available. |
Business

Bankruptcy watchdog issues debt warning

Canada's bankruptcy watchdog adds his voice to warnings that Canadians should watch their personal debt loads.

Callon warns of 'harsh realities' of insolvency

Canada's bankruptcy watchdog added his voice Fridayto warnings that Canadians should watch their personal debt loads.

James Callon, the superintendent of bankruptcy, said it's important for Canadians to be aware of the risks and possible consequences of taking on a large amount of debt.

"Significant events, such as a change in employment or income, a change in family status or a serious illness, can cause a huge drain on finances," he said in a commentary on the agency's website.

P.O.V.:

Do you have debt concerns?Take our survey.

"The combination of a large amount of debt and the sudden occurrence of a major life event could lead to the harsh realities of insolvency."

Callon issued the warningeven as he released data showing a 9.6 per cent dropin total insolvencies filed by eitherbusinessesor consumers in the 12 monthsending in October, compared with the same period a year earlier,when Canada was ina recession.

Business bankruptcies totalled 5,349 over the 12 months ending in October, down 22.5 per cent from the same period a year earlier.

Consumer bankruptciesfellnine per cent to 135,962 during those same months. But that total is still 22 per cent higherthan total consumer insolvencies two years earlier, before the recession.

Total insolvencies, 12 months ending:
October 2010 October 2009 Change
Newfoundland and Labrador 2,493 2,619 -4.8%
Prince Edward Island 605 558 8.4%
Nova Scotia 5,275 5,362 -1.6%
New Brunswick 3,761 3,946 -4.7%
Quebec 39,891 43,804 -8.9%
Ontario 59,675 68,429 -12.8%
Manitoba 2,769 3,152 -12.2%
Saskatchewan 2,489 2,594 -4.0%
Alberta 11,414 12,278 -7.0%
British Columbia 12,854 13,410 -4.1%
Northwest Territories 43 50 -14.0%
Yukon 38 42 -9.5%
Nunavut 4 11 -63.6%
Canada 141,311 156,255 -9.6%
(Source: Office of the Superintendent of Bankruptcy)

Canadian household debt has grown to an all-time high, spurred on in part by the impact of historically low borrowing costs.

Mark Carney, thegovernor of the Bank of Canada, and several economists have voiced concerns that when interest rates begin rising again, some Canadian households will be caught with debt burdens they can't handle.

With files from The Canadian Press