Consumer insolvency rate jumps 43% in Alberta
'We’re used to making a lot of money but we're also used to spending a lot of money.'
The rate of consumer insolvencies rose in Alberta in the second quarter of this year by 43 per cent compared to last year, according to the Superintendent of Bankruptcy Canada.
Personal bankruptcies increased by 32.4 per cent in Alberta, while consumer proposal filings — a formal agreement with creditors under the Bankruptcy and Insolvency Act to settle debts under conditions other than the existing terms — are up 51.5 per cent from 2015.
Total insolvencies — both consumer and business bankruptcies and proposals — rose 41.8 per cent in Alberta in the second quarter of last year to the second quarter of this year.
Alberta consumer insolvencies have increased by 43 per cent year over year, far outstripping the national average increase of 7.8 per cent, the federal agency says.
In Calgary, consumer insolvencies rose by 41.7 per cent over the past year, and in Edmonton by 45.6 per cent.
Angela Lock, an insolvency trustee with Grant Thornton, says people have spent their severance packages and are using up their Employment Insurance benefits.
"We're used to making a lot of money but we're also used to spending a lot of money," she said.
"We tend to have this outlook that things are going to get better really quickly but this is looking like it is going to be a problem for a while."
The number of insolvencies filed by businesses in Alberta dropped year over year, from 150 in the 12-month period ending at the end of June 2015, to 130 by the end this June.
Lock says she expects the number of people filing for insolvency will continue to rise into 2017.
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