Recent announcements of layoffs in Ontario by corporate giants like General Motors and Siemens will likely mean an exponential increase in the number of Ontario debtors filing for insolvency proceedings.
Recently, General Motors’ CAMI assembly plant in Ingersoll announced it will cut 400 of its workers.
Siemens has also announced the closing of its Tillsonburg plant, which equates to another 340 jobs lost.
Seasoned Licensed Insolvency Trustee John Adamson expects to see a surge in Ontario insolvency filings as a result of these recent events, which will put nearly 750 hard-working Canadians into unemployment.
Says Adamson, “Layoffs are one of the most common reasons individuals go bankrupt. When you lose your income, you lose your ability to pay back the debt you owe. And the average Canadian owes.”
In fact, the average Canadian is indebted to the tune of $22,000, not including their mortgage.
A recent Statistics Canada report for the fourth quarter of 2016 reveals that how much Canadians owe compared to how much we earn has reached a new high at 167.3%. So for every dollar of our disposable income, Canadians owe $1.67 in debt.
This debt coupled with the fact that more than half of Canadians are financially ill-prepared for unexpected emergencies sets the stage for bankruptcy.
Though it is widely recommended that individuals have at least a six-month reserve to draw on for emergencies, Canadians have less than $10,000 saved up for the unexpected twists life throws our way. And a quarter of homeowners have less than $1,000 in the bank.
Adamson has seen this many times before in his career. “Those debtors who lose their source of income and find themselves without an emergency fund often turn to credit cards to pay bills, creating a perfect storm that sets them headed for bankruptcy.” And without sufficient cash flow, it may be difficult to make a proposal to settle debts.
What to Do If You Get Laid Off
Even those who are lucky enough to receive a severance package or advance notice of a layoff may not know what to do with the money they have on hand. This is particularly true because they really don’t know how long it will take them to find their next gainful employment.
Adamson recommends that those in need of financial assistance contact a Licensed Insolvency Trustee immediately.
Trustees are federally-regulated, educated, credentialed, and licensed professionals who offer a full range of options to help Canadians resolve their debt.
Whether you need help to create a detailed budget given your new circumstances, or want to consider insolvency, a trustee is able to assist.
Adamson continues, “The sooner you see a trustee, the more options you may have available to you. Bankruptcy may not be inevitable. Get help today.”