Canadian consumer bankruptcies are rapidly picking up pace with British Columbia and Alberta residents leading the downtrodden pack. Compared to 2008 bankruptcy statistics, the total number of current Canadian bankruptcies has increased by more than 7,000.
In addition, "the number of Canadian consumers who filed for protection from creditors while they sorted out their financial problems also increased..." (Globe and Mail). Canadian economists are attributing this rise in bankruptcy to the amount of debt and the high rate of unemployment among Canadians.
While debt and unemployment are certainly contributing to the astonishing number of bankruptcies as of late, there are also some other reasons to consider. One of those lesser explored reasons may be due to the lack of traditional lender support.
As Canadians search for ways to save money and pay down debts, traditional lenders continue to deny loan applications. With no hope for a loan, and very little money saved, consumers are often left in the midst of a financial flood without a boat so to speak.
Many economists are also quick to point out that although the "total consumer bankruptcies numbered 27,542 in the first quarter of this year..." (Globe and Mail), most of this data can be linked directly to small businesses. However, some of these numbers also reflect upon everyday consumers like you and me.
What can be done about the current bankruptcy crisis? As consumers learn ways to save money, and small businesses learn to set aside "emergency" funds, lenders should be doing their part as well. Sadly, traditional lenders aren't about to start doling out money in a nose diving economy. This is impacting the average consumer more than many are willing to note. Without vital loans to keep their finances alive, consumers are simply turning towards bankruptcy as a last (and final) resort.
Contrary to current traditional lending tactics, private asset-based lenders are willing to fill that standard lending void by helping consumers get the loans that they need. As more consumers learn about asset based loans, private lenders are becoming a standard fixture within the average Canadian financial lifestyle.
There's no doubt that Canadians will be able to pull themselves out of the current financial crisis. But, until that point, many consumers are glad to know that private loans exist. As many are finding out, bankruptcy is not the only option - even when traditional lenders aren't willing to grant much needed consumer loans.
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