For the first time in history, there were more consumer proposal than personal bankruptcy filings in Ontario for an entire year. In 2012 in Ontario there were 23,236 personal bankruptcy filings, and 24,145 consumer proposals filed.
The number of personal bankruptcies filed decreased by 9% as compared to the previous year; consumer proposals decreased by 3.2%, so the overall insolvency rate dropped by 6.1% in Ontario.
This is the third consecutive year that total filings have declined, a stunning development after many years of continually increasing filings.
Personal bankruptcy filings declined in Canada in 2012 by 8.3%, while consumer proposal filings in Canada increased by 4.2%.
So what does this mean to the typical resident of Ontario struggling with debt?
I believe there are two encouraging signs:
First, the insolvency rate is falling, so fewer people are seeking legal protection to deal with their debts. That's good news, because the economy is stable (the Canadian unemployment rate is lower than in the USA), and interest rates remain low, so even if you have debt, low interest rates mean you can continue to make your payments.
Second, for those who need creditor protection, more people than ever are selecting a consumer proposal as a way to deal with their debts. I think that's great news, because most people I meet with want to repay their debts but they can't afford to pay everything in full, with interest, so a consumer proposal is a great bankruptcy alternative.
Of course if you have debt, it's small consolation that the bankruptcy rate is falling; you still need a solution to your debt.
My suggestion: give us 30 minutes to walk through your options, and explain how you can be debt free. Debt free in 30; that's our commitment.