Alberta saw its highest number of insolvencies this November 2022, exceeding its previous highest month back in March 2020, according to numbers released by the Office of the Superintendent of Bankruptcy.
With 1,402 insolvencies filed in that month, Alberta is seeing the highest volume of filings, up 8.5 per cent when compared to Nov. 2021.
“We saw filings being the highest that they have been since pre-pandemic, which was kind of a shock for a lot of people. For us, we kind of knew that this was coming,” said Sarah Stachiw, PR and communications specialist for Bromwich+Smith, a Calgary-based business help Canadians all across Canada with debt relief options. “We knew that the government subsidies that were going out were just going to stall everything. We knew that the inevitable was going to happen, the other shoe is going to drop, and bankruptcy and insolvency are going to happen. Inflation is up across the board, we are seeing grocery stores increase, mortgages increase, gas prices increase. When you see all these expenses going up, people aren’t seeing the increases in their paycheques, so expenses without the added income mean there is going to be a pitfall somewhere.”
Insolvency is when there is financial distress in which a business or person is unable to pay their bills, resulting in bankruptcy.
“The majority of those numbers are actual personal bankruptcies, I believe out of that 1,402, only 82 were business bankruptcies,” said Stachiw. “We are seeing it from single parents, to families, to small business owners. We have been saying for the past two years, for every dollar the average Canadian makes, we are $1.76 in debt.”
With the surge being seen since May 2022, inflation rates have pressured consumers along with the cost of living going up.
“Do you have those savings to be able to protect yourself? A lot of cases people don’t. That is part of what we do here at Bromwich+Smith, talking to people about making sure that people are budgeting properly and that you are putting money aside and not just paying off your debt, but also putting money aside to save up for those expenses that inevitably happen,” said Stachiw. “If you have that bit of emergency savings, then you are not going to put added expenses on your credit.”
With the provinces also seeing numbers of insolvency on the rise, Ontario filing 3,475 and B.C filling 974, the impacts of the COVID pandemic is still taking its toll on the Canadian economy.
“We know how scary and intimidating it can be, but it doesn’t have to be if you have the right team and people to support you,” said Stachiw. “Knowing that there is options and there are people that you can talk to and get the right information is the best bet to go.”
By Ryan Clarke, Local Journalism Initiative Reporter
Original Published on Jan 11, 2023