A Closer Look at Insolvency and Personal Bankruptcy Trends in Toronto
According to the statistics gathered by the Office of the Superintendent of Bankruptcy, after peaking in 2009, there appears to be a trend towards decreasing levels of personal bankruptcy filings in the Toronto area.
The following graph and chart illustrates this trend:
The first six months of 2012 shows a continuation of this trend with 451 fewer Toronto area personal bankruptcy filings than were filed in the first six months of 2011.
However, it is essential to look at the bigger picture – to better understand these numbers.
In 2009, the rules surrounding surplus income changed, resulting in people who filed bankruptcy and had surplus income, having to pay more money into their bankruptcy estate. In addition, for those with surplus income, their length of bankruptcy was increased to 21 months from 9 months (for a first time bankrupt).
As a result of the changes in surplus income guidelines and improved public awareness, more insolvent people in the Toronto area are choosing to file for consumer proposals instead of bankruptcy.
When we combine the personal bankruptcies and consumer proposal rates (which gives us the insolvency rates) for the Toronto area, we are able to see that in addition to a decrease in personal bankruptcies, there is a decrease in the overall number of people filing for insolvency:
There is no way of predicting where insolvency rates in the Toronto area will go. However, the above numbers from the Office of the Superintendent of Bankruptcy, do seem encouraging.
