Canadian bankruptcies soar 47 percent!

[Krustee]

Canadian bankruptcies soar 47 percent

TORONTO (AP) — The number of Canadian consumers and businesses going bankrupt soared nearly 47 percent in December.

The Office of the Superintendent of Bankruptcy said Monday 8,299 individuals and businesses went bankrupt in December, up from 5,659 for December, 2007, a jump of 46.7 percent.

The latest numbers are a staggering sign of how quickly the Canadian economy has slowed.

The financial crisis and the global sell-off of commodities have hit the country hard since the summer. The country lost a record 129,000 jobs last month and central bank is predicting economic output will contract 4.8 percent in the first quarter.

However, the December bankruptcy total was down 4.3 percent from the 8,669 who filed for bankruptcy in November.

Laurie Campbell, executive director of Credit Canada, a nonprofit credit counseling organization, said she's surprised at how quickly bankruptcies have climbed, even given the current economic sentiment.

"We just heard bits and pieces about recession in October, and suddenly in December the numbers have crept up that high," Campbell said.

Campbell said Canadians have spent the past few years accumulating more debt than ever. Compound heavy debt with a recession and she said the result is the dramatic upswing in the number of Canadians declaring bankruptcy.

CIBC economist Benjamin Tal predicts that the results will only worsen in the new year, pushed higher by the rising unemployment rate.

http://www.google.com/hostednews/ap/article/ALeqM5g9Q2zrp9CpJpo81rKizgzw0SLcHgD9689PHO1

 

[Krustee]

Bankruptcies in PEI are up a whopping 258%

Prince Edward Island saw the biggest jump in consumer bankruptcies in December, up 258.3 per cent,
with the Yukon second at 200 per cent, the Superintendent of Bankruptcy said.
Alberta’s consumer defaults spiked by 106.1 per cent and Ontario’s by 51.5 per cent.

Bankruptcy spike 'highly unusual': Trustee

Consumer busts jump 50 per cent

OTTAWA - Rising unemployment, high debt and the continuing credit crunch has caused personal bankruptcies in Canada to soar, and if people’s worst fears about their jobs are realized, the problem isn’t about to go away any time soon.

Overall bankruptcies jumped 46.7 per cent to 8,299 in December, up from 5,659 a year earlier, the federal Office of the Superintendent of Bankruptcy reported Monday.

Consumers were by far the hardest hit as personal bankruptcies soared 50.6 per cent to 7,821 in December from 5,192 a year earlier. The number of business bankruptcies was up 2.4 two per cent to 478 from 467 from the year-earlier period.

Douglas Hoyes, of Hoyes, Michalos & Associates, an Ontario bankruptcy trustee firm, said the degree to which the number of bankruptcies has increased over a 12-month period is “highly unusual.”

“I can’t remember ever seeing an increase like that,” he said.

The federal bankruptcy office was unable to say whether December’s annual rise in bankruptcies has ever been matched.

Benjamin Tal, senior economist with CIBC World Markets, said the number of bankruptcies has been higher at times in the past, but he said he fears “this is not the end of it.”

“We’re in a consumer-led recession,” he said.

Tal and others say rising unemployment will mean even more consumer bankruptcies in the coming months.

On Friday, Statistics Canada reported the economy lost a record 129,000 jobs in January, almost all full-time positions, pushing the unemployment rate to 7.2 per cent from 6.6 per cent in the previous month.

Hoyes attributed the growing number of personal bankruptcies to a lethal combination of high personal debt, a job market in decline, falling asset values and a shortage of available credit.

“Two years ago, if you got laid off for a couple of months, it didn’t matter,” he said. “You could go to the bank, refinance your mortgage, borrow an extra $20,000, and everything was fine.”

But now, with falling house and investment values, combined with the banks’ reluctance to lend, “the safety valves that were there are gone now,” Hoyes said.

To lessen the probability of bankruptcy, Hoyes recommends people pay down debt whenever possible, particularly during good times when they have ample resources to do it.

He noted that the average ratio of people’s debt to annual income is currently an unprecedented 133.9 per cent, and increasing every year.

Prince Edward Island saw the biggest jump in consumer bankruptcies in December, up 258.3 per cent, with the Yukon second at 200 per cent, the Superintendent of Bankruptcy said. Alberta’s consumer defaults spiked by 106.1 per cent and Ontario’s by 51.5 per cent.

Business bankruptcies were highest in Saskatchewan and Manitoba, up 45.5 per cent and 42.9 per cent, respectively.

Many fear they could be the next to lose their jobs as the recession deepens, according to a poll released Monday. An Ipsos Reid study showed 24 per cent of Canadian workers concerned they may lose their jobs this year.

Among respondents in the private sector, 27 per cent felt their jobs were in jeopardy, while 14 per cent of public-sector employees expressed concern.

People who work for organizations where layoffs already have been announced were the most worried group, with 48 per cent of these respondents expressing concern about their job security. Regionally, respondents in Eastern Canada were more worried than in the West.

The Ipsos Reid poll was taken online Jan. 20 and involved 1,100 people.

J.B. Aloy, an employee-management expert with Ipsos Reid, said in times like these, companies can alleviate some of their workers’ worries by keeping the lines of communication open.

Even if there is a risk of job cuts, management is better off to communicate this to their employees, he said. Otherwise, people might rely on the rumour mill for their information, which he said can create a far worse perception than reality and hurt worker morale.

“Transparency is not only for good times; transparency is for difficult times as well,” he said.

http://www.canada.com/Life/Bankruptcy+spike+highly+unusual+Trustee/1269693/story.html

 

[Krustee]

Anybody read or hear the latest news from Japan?

 

[island-guy]

People have been sucking the equity out of their homes and spending it for a while now in places like Toronto and Vancouver.

I've heard lots of people talking about having 'two incomes' one from their job and another by refinancing their house every year. All of it went into spending and they saved nothing.

If they end up underwater on their mortgage, they just max out their credit cards, bury the cash in a mattress and declare bankrupcy and start over again

The bank employees who got bonuses for mortgage volume are now going to be laid off as a cost saving measure by the bank.

Hopefully this will teach the banks not to make so many junk loans

 

[mclovin76]

theres alot of people out of work right now, my friends are selling their houses cheap and renting if they can make a little money others are just plain out of a job, and out of credit. The amount of crime that will start to happen will be astonishing for some. I dont mean to be paranoid but if you dont have a gun license take the course now. Get yourself prepared justin case. Also, stocking up on canned food and flour is a good idea, as well as honey.

 

[wess]

People have been sucking the equity out of their homes and spending it for a while now in places like Toronto and Vancouver.

I've heard lots of people talking about having 'two incomes' one from their job and another by refinancing their house every year. All of it went into spending and they saved nothing.

If they end up underwater on their mortgage, they just max out their credit cards, bury the cash in a mattress and declare bankrupcy and start over again

The bank employees who got bonuses for mortgage volume are now going to be laid off as a cost saving measure by the bank.

Hopefully this will teach the banks not to make so many junk loans

Hopefully this will teach dumb people to live within thair means.