September 30, 2016 12:53 pm

More Albertans filing for bankruptcy and consumer proposals: report

A majority of Manitoba and Saskatchewan residents are concerned about their debt and their ability to pay it off, according to a new survey by debt company, MNP.

Ryan Remiorz/The Canadian Press

A new report shows the percentage of Albertans who can’t pay their debt has spiked.

According to the Office of the Superintendent of Bankruptcy Canada report, insolvencies (bankruptcies and consumer proposals) increased by 24.5 per cent in Alberta between July 2015 and July 2016. There was a 7.9 per cent increase in bankruptcies, with consumer proposals spiking 36.9 per cent.

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READ MORE: High debt loads are catching up to Albertans

The Bankruptcy Canada Superintendent Office believes more Albertans are choosing consumer proposals over bankruptcy because proposals allow a person to make a proposal to their creditors to pay back all or a portion of the debt owing under the new terms.

Also, consumer proposals allow for debt consolidation, interest free terms and flexible payback periods, as well as allowing to keep ownership of assets which isn’t the case with bankruptcy.

Licensed bankruptcy trustee Freida Richer recommends those dealing with debt deal with their financial issues immediately.

“Don’t wait until things have worsened, the situation has worsened to the point where your creditors are suing you, they’re seizing your income under a wage garnishment,” Ficher said.

“But ultimately understand there are alternatives to bankruptcy.”

The total number of consumer insolvencies in Canada has increased 3.5 per cent in Canada from July 2015 to July 2016, with consumer proposals making up 48.9 per cent of the portion of insolvencies.

READ MORE: Alberta unemployment rate now higher than Nova Scotia’s

In July, Alberta’s unemployment rate rose to 8.6 per cent which is the highest it’s been in 22 years.

© 2016 Global News, a division of Corus Entertainment Inc.

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