The Great Deferral – Effects of Covid-19 on Personal and Business Bankruptcy

August 14, 2020 10:45 pm Published by Leave your thoughts

It has now been over 6 months since British Columbia had its first confirmed case of COVID-19. And 4 months since a state of emergency was declared, and a federal lock-down was mandated. Many Canadians have been laid off, or have quit their jobs, and have been living off of CERB or EI.

Since then, the number of Personal Bankruptcies has gone down significantly. In British Columbia, there were 961 personal bankruptcies filed in the first quarter of 2020, and just 560 in the second quarter of 2020. Comparatively, that time last year had 1,068, making that a 47% decrease. The number of Personal Consumer Proposals has also decreased, with Q2 2020 seeing 1,330. Compared to the 1,813 consumer proposals filed in Q2 2019, this marks a 26% decrease.

However, most likely due to the lack of business, Business Bankruptcies have stayed relatively consistent: 25 in Q2 2019, 21 in Q2 2020. And Business Proposals have doubled: 10 in Q2 2019, 20 in Q2 2020.

Corporate insolvencies, however, have increased drastically. Q2 2019 had 9 Bankruptcies and 5 Proposals from corporations; Q2 2020 saw 16 of each. This marks a 77% increase in corporate Bankruptcy, and a 220% increase in corporate proposals.

Of course, CERB will cease as of October 3rd, 2020. After that, many Canadians may be faced with a dire financial situation, and we may see a significant uptick of personal insolvencies.

 

 

 

 

Source for this data: https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br04339.html

 

 

 

 

See Also:

Covid19 – Debt Crisis – Help Available.

Covid19 Pending Debt Crisis: Don’t Panic – But Use the Down Time Wisely.

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