The View From The West – Will The Vancouver 2010 Olympics Impact Personal Bankruptcy Rates?
October 5th, 2009 by A Licensed Insolvency Trustee
My name is Bruce Gandossi. I’m a chartered accountant and licensed trustee in bankruptcy with Sands & Associates in British Columbia. During my over 25 years of working with people in financial trouble, I am here to report that the period from 2005 to 2009 has been the most volatile period I have witnessed.
Starting in 2005 the economy of British Columbia in general, and the Vancouver and Whistler area in particular, entered the “boom” phase. Numerous massive construction projects for the 2010 Olympics got started, and jobs were plentiful. By 2007 the boom was at it’s peak. Even workers with no experience were able to get high paying jobs in construction and related industries.
Then, in late 2008, the credit crisis hit the world, and the economy stopped growing. By late 2009 most of the major construction projects for the Olympics are finished, and our unemployment rate has increased to close to the national level.
Our housing market, which was booming up until late 2008, has stabilized. House prices are still within 10% of their peak, but I’m starting to meet with a lot of people who bought a house at the top with only a small down payment. They are finding it hard to make their payments, but with the decline in house prices they are finding it difficult to sell their property and recover enough to repay the mortgage.
The decline in construction jobs, and the weakening real estate market, is now hurting all of the related service industries. For the first time in a few years I am starting to see waiters and waitresses who are finding their incomes dropping, and they are having trouble keeping up with their payments.
So what do I tell people? I’m telling everyone that the boom is over. We may have a mini boom during the Olympics, as all of our hotels and restaurants will be full with visitors from around the world. But after that, incomes won’t be rising, and house prices won’t be rising, so we won’t be able to rely on overtime or a rising real estate market to deal with our debts.
I advise everyone to take action now. My firm, and bankruptcy trustees across Canada offer a no charge initial consultation to review your situation. People are often worried that a trip to a bankruptcy trustee means they have to go bankrupt, but that’s not the case. If you are still working, in many cases we can show you how a consumer proposal may be the perfect solution to your debt problems.
The 2010 Olympics will be a great spectacle in B.C., and for all Canadians, but the Olympics alone can’t solve debt problems, so if you are struggling with too much debt, contact a trustee today.