Thompson-Okanagan bankruptcies follow growing national trend – Kelowna News

The number of Canadians declaring insolvency has been on the rise in recent months, and the trend is being seen locally.

The latest data released Thursday by the Bankruptcy Review Board showed that total insolvencies across Canada, including individual and business insolvencies, rose 7.3 per cent in November 2022 compared to the previous month. Compared to November 2021, consumer insolvencies increased by 16.3 percent last November, while business insolvencies rose by 58.3 percent.

“This is the first time we’ve seen numbers close to pre-pandemic levels,” Michelle Statz, a licensed insolvency practitioner at Bromwich+Smith, said in a press release.

“With the end of government benefits like CERB and the onset of record inflation, it was only a matter of time before the other shoe dropped and people began to feel the full effects.”

BC had a total of 974 insolvency filings in November 2022, the highest number of filings in the province since October 2019. This number was 32.5 per cent higher than in November 2021.

Local data from accounting firm MNP Ltd. show an increase in insolvency filings in Thompson-Okanagan through the second half of 2022. There were 146 insolvency filings in October of last year, the most recent month MNP has data available, the most the region has seen since March 2020.

But insolvencies across the country are still below pre-pandemic levels, with consumer insolvencies still 20 percent below November 2019 levels.

Jeane Herman, a licensed insolvency practitioner and vice president of Kelowna-based MNP Insolvency and Corporate Recovery, says insolvencies have declined during the pandemic for a number of reasons.

“Lenders … changed many times when payments were required,” Herman said. “When people had a mortgage, they may have been able to defer their mortgage payments… Some credit card companies were not collecting payments through COVID.”

But some of those who were able to survive the pandemic financially are now facing difficulties.

“I guess that’s why.” [insolvencies] now they are starting to increase more because the government has now withdrawn the subsidies and the creditors are now starting to collect. And interest rate hikes,” Herman said.

He also points out that inflation increases the cost of living.

“[Inflation] plays a big role, people say ‘I can’t do it’,” she said. “Their reduction in income through COVID is one of the reasons why insolvency is happening now. They were able to return to their pre-Covid income, but their debt increased.

“We were looking at around $300 in groceries [a month] per person in the home unit, and no, we’re looking closer to $400 … and it could be more.”

Herman says there are options for those struggling with debt. Some are able to budget their way out of debt for several years, while she can sometimes help others negotiate settlements with their creditors.

“When I sit down with someone … we talk about their story because their story is unique to them and I need to know what’s going on,” she said. “The other piece of the puzzle is I want to know what’s coming in and what’s going out, so what’s left is to deal with the debt and start exploring my options.”