The pandemic has been hard on us all … emotionally and financially.
And while one might think bankruptcies have increased over the past 15 months, Connor Beverley, insolvency administrator for Beverley and Associates, says that’s not the case
“What we’re actually seeing is the support from the government, for both people and businesses, actually offset a lot of the damage that was being felt COVID-19,” he said.
The number of insolvencies they handled last year was down quite a bit and nationally insolvencies were down about 30 per cent since 2019.
“It was surprising to us,” he said. “It was actually the largest decrease ever recorded. The business insolvencies were down as well, which is the complete opposite of what you would think would happen.”
However, he warns the lower numbers may not be the new norm.
“Once the government taps are turned off and the aid programs end, I think we are going to have a landslide of insolvency filings,” he said. “It will be interesting to see the change once people start to feel that financial pressure come back.”
Beverley and Associates works with people who are feeling overwhelmed by their debt problems.
“We kind of guide them in a direction that makes the most sense for them,” Beverley said.
That help most commonly takes one of two paths … declaring bankruptcy or a consumer proposal.
“It’s a debt settlement offer to unsecured creditors,” he said. “That one is based on what you can afford to pay, it’s not based on what you owe. The offer is to pay them over a longer period to time. It’s interest free or you pay them less than the total amount that’s owed.”
A consumer proposal goes to all your creditors and if a majority of them vote to accept the proposal, all creditors are bound by it. Beverley said they have a 96 per cent success rate with the proposals that they make so, obviously, it’s the most common solution.
Declaring bankruptcy is another option, which, while carrying a lot of stigma, can be a path to take.
“A lot of people think of it as financial rock-bottom,” he said. “But really it can provide relief from the burden of overwhelming debt load, which people often hold on to for too long. It provides an immediate relief and protection from creditors.”
He added bankruptcy doesn’t necessarily mean you lose everything you have.
“A lot of the time that’s not true. If they can afford to keep their house, their car, a lot of the time they can,” he said. “A lot of the time people wait too long to seek help.”
Beverley and Associates has been helping people with financial problems for a long time and, while they will continue with that work, are moving away from being known as the ‘bankruptcy people.’
“We’re trying to help people understand that contacting us shouldn’t be a last resort,” he said. “There’s options for you other than a bankruptcy. Even if they want to come in for a discussion, there’s no obligation. Sometimes just talking about the options that they have, in a non-judgemental fashion, can be helpful.”
People seeking help with Beverley and Associates will first be asked to fill out a questionnaire which outlines some of their financial situation and then have a personal meeting with a trustee. If you are having financial problems, you can contact Beverley and Associates at www.debthelpbc.com
