Debt continues to catch up with Ponoka residents

  • Apr. 13, 2011 4:00 p.m.

CHARLES TWEED/Ponoka News

Ponoka went against the national trend in 2010 showing an increase of insolvencies — bankruptcies and proposals.

The total number of insolvencies in Canada last year decreased by 11.5 per cent to about 140,000 filings. Bankruptcies decreased by 20.4 per cent, whereas proposals increased by 19.8 per cent across the country.

A proposal occurs when a person cannot make the entire payment to a creditor but instead of claiming bankruptcy, the two work out a number that is acceptable to both, essentially extending the period of time the money owed has to be repaid.

Alberta saw a 58 per cent jump from ’08 to ’09, Debt continues to catch up with Ponoka residents the first full year of the recession but Donna Carson, senior vice-president with Meyers Norris Penny said those numbers are more in line with yearly norms.

“Alberta’s number did jump quite a bit in ’09 but part of that increase was because the economy was so good in Alberta in ’06, ’07, ’08 that our typical number of insolvencies was lower in those years,” said Carson. “Because our volumes were low from years past with the economy being good and the oil patch booming, getting back to the normal number of insolvencies in 2009 was a big jump.”

Ponoka, however, saw an increase in insolvencies in 2010. The numbers are based on the T4J postal code showing an increase by 22 per cent — 36 insolvencies filed for — which not only went against national trends but provincial numbers as well. The increase this year is in addition to a 92 per cent increase last year from the year previous.

“Part of the reason is because the number of insolvencies within a town the size of Ponoka is low, so any increase in just a few numbers is a big percentage but not a big change necessarily in volume,” said Carson.

Carson expected this year to be similar to last year based on the traffic she’s seen to date. The major reason is that most of the insolvencies being filed regard old debt — debt that people had incurred prior to the recession but can no longer afford to make the same payments they were making before the slowdown.

She also wanted to stress to anybody who might be in financial trouble to seek help and not allow their debt to paralyze or take control of them.

“If they are finding themselves in this situation to sit down with somebody and find out what the options are sooner rather than later. Options like the proposal. If we wait too long those options may not be there anymore…It might help putting it on the table versus the fear of the unknown.”

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