Personal bankruptcies soar in BC

Personal bankruptcies in British Columbia were 78-per-cent higher in March than in March 2008 -- far more than the national average increase of 57 per cent, according to figures released Tuesday by the federal Office of the Superintendent of Bankruptcy.

The report noted that there were 960 personal insolvencies in B.C. in March, up from 889 in February and 538 in March of last year.

One reason given for the above-average B.C. rate is the high cost of living in the province.

Across Canada, there were 10,578 personal bankruptcies filed during the month, up from 6,736 in March 2008. On a monthly basis, consumer insolvencies were up 17.3 per cent from 9,020 in February.

Overall, total bankruptcies, both personal and business, jumped 51.8 per cent in Canada to 11,085 in March from a year earlier and were up 16.7 per cent from 9,495 in February. In B.C., total bankruptcies numbered 995, up 74.6 per cent from March 2008.

Meanwhile, there were 507 business bankruptcies in Canada in March, down 10.3 per cent from 565 a year earlier. However, business insolvencies were still up 6.7 per cent from 475 in February. In B.C., business bankruptcies rose 9.4 per cent, from 32 to 35 since March 2008.

Deane Gurney, president of Surrey-based Sands & Associates Trustee in Bankruptcy, said in an interview Tuesday that his company's business is up 50 per cent since September.

He said the basic problem is that too many people have overextended themselves.

"People are living so close to the edge," Gurney said. "The way the economy fell apart so quickly, they've been living off of credit and have just run out of credit."

He said a major reason B.C.'s bankruptcy rate is higher than the national average is the province's higher living costs.

"The cost of living is much higher than anywhere else other than Toronto. And people are carrying a huge amount of debt."

He said many families require two full-time jobs to make ends meet and that if one person becomes unemployed or gets sick, "it doesn't take long to have huge financial difficulties."

The Canadian economy contracted by 3.4 per cent in the fourth quarter of 2008 and that decline likely deepened in the first quarter of this year, according to government and independent forecasts. The recession has prompted many companies to slash jobs and cut production, resulting in 321,000 job losses since peak employment in October.

Consumers in Ontario had the biggest jump in bankruptcies in March, up 60.3 per cent from a year earlier.

(prepared by Brian Morton/Vancouver Sun)