Bankruptcy rates on the rise

The number of Albertans filing for bankruptcy this year has risen compared to the first quarter of 2018.

The first quarter of 2019 saw the number of consumer insolvencies in Alberta rise by 15.2 per cent, according to a report by the Office of the Superintendent of Bankruptcy released Monday. In comparison, Canada as a whole saw a six per cent increase.

Edmonton had a 10.6 per cent increase between the first quarters of 2018 and 2019, while Calgary held an 8.5 per cent increase.

“Alberta has been going through a tough time for the past three or four years,” said Zaki Alam, an Edmonton-based insolvency trustee with MNP advisory services. “There’s been job loses, there’s a lot more cash-flow issues.”

Alam said it has become normal for workers laid off during the energy sector’s economic downturn to find lower-paying jobs without lowering their monthly expenses.

With less money to go around, Alam said many Albertans often turn to quick fixes through unlicensed financial planners after finding themselves in what he calls a “financial sweat box.

“They need to really take a reality check and think where are they going to be in the next six months, 12 months in terms of a budget. Are they going to be OK? Are they going to be able maintain those debt level payments,” said Alam.

Alam said people struggling with debt should always go to a licensed financial adviser, where assessments are free, if they need help managing their finances.

MNP president Grant Bazian said there needs to be a destigmatization of debt in the country so Canadians feel they can ask for help with their financial issues.

“An absolutely staggering number of people feel like they can’t make ends meet,” said Bazian in a news release. “Our hope is that by bringing this conversation to the forefront, more people will realize they are not alone and that debt help is available.”

Consumer insolvency numbers include both bankruptcy claims and proposals in which consumers file for a credit repayment with higher rates and less regulations than declaring bankruptcy.