The Office of the Superintendent of Bankruptcy recently released the year to date statistics for bankruptcy and consumer proposals filings.

The good news for the Chatham area is the decrease in bankruptcy filings for the first 6 months of 2011 compared to 2010. 320 people filed for bankruptcy in the first 6 months of 2010 while 237 filed in the same period for 2011 for a decrease of 26%. There were 64 consumer proposals filed in the first 6 months of 2010 and 104 for a 63% increase.

How is that good news? A decrease in bankruptcy filings is good if it means the decrease is caused by people being able to manage their debt. If the number of consumer proposals filed has increased it does mean that people can manage some kind of payment.

Since the bankruptcy rules changed in 2009, bankruptcy has become longer and more expensive for many people. Rather than having an expensive bankruptcy for up to 36 months, you can have a reasonable payment under a consumer proposal for a longer period of time.

However, if you need help managing your debt it’s important that you speak with a licenced bankruptcy trustee. Don’t be fooled by the fancy ads of debt consultants. I am meeting with too many people who spent thousands of dollars in fees only to either be referred to a trustee to file a consumer proposal.

For the Chatham economy in general, a declining personal bankruptcy rate is good news. In order to make the consumer proposal someone needs to have a source of income, usually employment income or pension. An increase in consumer proposals shows that people are working, although still struggling with their debt. They can make some payment towards their debt, they just need help. However, Chatham’s economy has taken some bad hits in the past month with the news of plant closures. This could mean that we will start to see an increase in the number of bankruptcies filed.

If you are interested on reading how Chatham compares to other cities, you can visit Bankruptcy Canada and read more about consumer proposals in Canada.

Hoyes Michalos is one of the largest filers of consumer proposals, so if you are interested in learning more about this increasingly popular option to bankruptcy, call me at 519-351-2323 or email me to arrange a no charge consultation.

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Chatham has had a number of challenges over the last few years. Plants have closed, and jobs have been scarce. The recession has hurt Chatham more than other cities in Canada.

One of the questions I am often asked is this: What happens if I leave Chatham to find a job; can I file bankruptcy somewhere else? Can I file bankruptcy in Canada, even if I lived in Chatham for many years?

The answer is yes, you can file bankruptcy anywhere in Canada. Bankruptcy is federal law, so the rules are similar anywhere in Canada. The only significant difference is what you are allowed to keep when you go bankrupt in Ontario, because those rules are subject to provincial law.

For more information, consult the bankruptcy Canada website.

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