Canadians are facing a projected increase in personal bankruptcies in 2012. Experts say this is due to an increase in lower paying jobs that just won’t allow people to make ends meet on those wages.
Benjamin Tal of CIBC World Markets said, “Note that in recent years, the number of proposals … has risen dramatically, with the proposal rate reaching an all-time high in 2011. That’s largely due to changes to the Bankruptcy Insolvency Act (BIA) in 2008 with the most significant being the increase in the limit of the size of non-mortgage debt for qualifying for a proposal from $75,000 to $250,000 – making proposals more attractive relative to the bankruptcy route.”
The underlying issue in Canada is not necessarily the options people have for addressing their problem debt, but that a decrease in wages leaves little extra money to fund either a personal bankruptcy or a formal and binding reduced repayment arrangement called a “Consumer Proposal.”