July 4, 2012
CALGARY, AB, Jul 4, 2012/ Troy Media/ – When debt repayment becomes unmanageable, one of the unfortunate options is to declare personal bankruptcy. Thankfully, the number of people having to file has been falling since the peak of the 2009 downturn.
In April there were 523 personal bankruptcies in Alberta, down from 568 in the previous month. The level of personal bankruptcies has been stable in recent months but has trended downward slightly over the last two years.
Total personal bankruptcies over the past 12 months ending April 30, 2012, were down 15.4 per cent compared to total bankruptcies over the previous 12 months. Statistics on personal bankruptcies – also known as consumer bankruptcies – are tracked by the Office of the Superintendent of Bankruptcy, which is a federal government agency of Industry Canada. The agency also tracked business bankruptcies, which are down 23.6 per cent compared to the previous 12 months.
Tracking the number of personal and business bankruptcies is another helpful measure of the general health of provincial economies. Currently, Alberta’s strong labour market and rising wages helps households manage debt levels. Business bankruptcies are lower because of healthy books and sales when the economy is growing.
But another major factor preventing personal or business bankruptcies is the environment of low interest rates. Borrowing rates are at near-record lows, helping households and businesses manage debt levels – and given the fragile global economy interest rates are almost certain to remain low. This, along with Alberta’s healthy economy, suggests bankruptcies are unlikely to spike higher anytime this year.
| ATB Financial
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