‘Joe Debtor’ gets older

The age of bankruptcy in Canada is growing.

There’s a troubling move towards more debt later in life.  Many Canadians are now going through their 50s with an increasing debt load rather than using that time to pay off debt.

But between 50 to 59 is usually the time when a person is trying to reduce debt and prepare for the golden years, says Douglas Hoyes, a trustee with the Ontario-based bankruptcy and consumer proposal services firm.

“We found, nope, in fact it’s the opposite. It keeps building and building,” says Hoyes, referring to debt loads.

The surprising thing is that the majority of these bankruptcies aren’t occurring due to unemployment:

A common stereotype is that the average bankrupt person is unemployed, but the study shows that 81 per cent of insolvent debtors were employed at the time of filing. The average take-home pay for Joe Debtor was $2,366 per month on a net basis, while the average household income was $3,058.

Read the full article here.

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Sorry Bears
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Sorry Bears
vangrl
Member
vangrl

http://www.cnbc.com/id/100725735

“”It’s little things like the HELOC business in this country that scare me and suggests that there is a time bomb waiting to go off in the Canadian financial system,” Hui wrote.”

Very Little Gravitas Indeed
Guest
Very Little Gravitas Indeed

@1: Whatever PR firm wrote that REIT advertisement hasn’t been paying attention, or is hoping you haven’t:

http://www.bloomberg.com/news/2013-05-07/china-s-gold-purchases-from-hong-kong-expand-to-record-in-march.html
http://www.reuters.com/article/2013/05/08/hong-kong-china-gold-price-idINDEE94701420130508

Similar stuff happening in India as well. We have a lot of miners here in Vancouver who would be happy to see the gold price go back up, so heavy Asian gold demand is probably a very weak bullish indicator if anything.

southseacompany
Member
southseacompany

From CNBC: “Is the Canadian Housing Market Falling Apart?”

http://www.cnbc.com/id/100725735

“Megan McArdle at Daily Beast said that what we’re learning is that Canada didn’t avoid a housing bubble and financial crisis—it’s just that the Canadian crash is “on tape delay.””

Many Franks
Member

The Globe & Mail unintentionally imitates The Onion:

Real estate agent Tim Hiltz leaves the biz to start a garden supply store in Coal Harbour with his husband Mark. They then spend many column inches lamenting the hollowed-out state of Coal Harbour — all temporary summer residents, no community.

The guy’s a real estate agent; you’d think he’d be aware of what the condo boom has done to Coal Harbour.

The punchline for me, though, is IT’S A GARDEN SUPPLY STORE. IT’S SEASONAL, YOU FOOLS.

Anonymous1
Guest
Anonymous1

Funny business in Ottawa:

Incomes for Immigration purposes are to be checked directly via CRA.

Incomes for Mortgages via CMHC are NOT to be checked via CRA. Hence the prevalence counterfeit software to alter Notice of Assessments.

To bring the market in line, just get income values directly from CRA, whether a local or a foreigner. A foreigner would have to declare his wordlwide income to CRA to qualify. Otherwise he would have to declare where he is getting the funds from.

Ottawa is in the funny business.

marc
Guest

Finance 101 – Never watch or believe anything CNBC says.

Monday – economy booming, come Wednesday its slowing a bit then by Friday we’re in a depression.

Hype news.

Democrass
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Democrass

Here is a passage from that CNBC article that shows how boomers may be the largest driving force behind the bubble. In Vancouver, many boomers who bought average houses in their 20s and 30s on the West side have gains of $2,000,000 and up. They can borrow that out in a HELOC and buy more houses with super cheap interest only payments:

e discovered that home buyers are using home equity lines of credit to finance the purchase of their homes. Because the rules for HELOCs are less stringent than those for mortgages, they are able to borrow far more. This essentially means they have floating rate, interest only mortgages. Because they aren’t making principal payments, they can afford much larger mortgages on more expensive homes.

Dead Heat
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Dead Heat

” More debt later in life ”

Small wonder as more and more savers are watching spenders who complain the loudest get rewarded. Just another example that the squeeky wheel get’s the grease.

The only good news is that strapped boomers are more likely to cash in the equity in their homes before it’s too late.

mac
Member
mac

Democrass,

It figures. The boomers have literally eaten, guzzled and trampled on everything since they came of age. They completely shunned and laughed at the frugality of their depression-era parents and have brought their children to the brink of the same 1930s type disaster.

Democrass
Guest
Democrass

From the Globe:

Canada’s bank regulator is casting a wary eye on uninsured mortgages of more than 25 years as policy makers in Ottawa continue to fret about the housing market and high consumer-debt levels.

It is not clear what, if any, actions the Office of the Superintendent of Financial Institutions may take. The regulator is talking to lenders about the issue, and assessing the risks, in deciding whether it needs to crack down.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/osfi-probes-longer-term-uninsured-mortgages-could-act/article11880827/

It's the Economy stupid
Guest
It's the Economy stupid

Anybody else notice that the hot topic of HAM has sort of dried up?

I think real estate plays a much bigger role in the economy than most people realize, and the sudden end of foreign investment in Vancouver is just the beginning of the draught.

Dead Heat
Guest
Dead Heat

Hi Democrass #10

Not much point in bitterness or complaining about demographics.

If there is a problem, it was caused by the sheer number of boomers rather than some irresponsible character trait.

Um...
Guest
Um...

Is anyone expecting the rate of price declines to increase? So far this housing crash has been a big bust. We are basically the same place we were last year. It seems that sellers actually don’t have to sell. And that those that do aren’t pushing prices down significantly.

If this isn’t a soft landing, what would you call it?

Democrass
Guest
Democrass

Everyone with a brain is expecting prices declines to accelerate.

It happened last year starting in June. It will happen this year starting in June. And declines will continue until around March 2014 when the spring market brings in buyers and prices stablize. Then in June 2014, declines will resume. Replay this pattern until prices return to historically normal (for Vancouver) multiple of incomes and rents.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

It’s may 13, 2013. Think back 6 months, is this where you expected the market to be?

Think back 1 year ago, is this where you expected the market to be?

Think back 5 years ago, is this where you expected the market to be?

If you’re wrong again and again year after year you should rethink some of your assumptions. It’s the only rational to do.

kabloona
Member
kabloona

#7 – CNBC can really suck alright, but that article on the housing market was pretty balanced, I thought. Pointed out the near impossibility of shorting the Canadian housing market…

Troll
Guest
Troll

“Everyone with a brain is expecting prices declines to accelerate.”

– Of course the problem is that prices are currently increasing, not declining.

bon jovi
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bon jovi

so if article says that it is not due to unemployment then why boomers are bankrupting? besides opening a floral shop in ghost part of the town 🙂

jesse
Member

“prices are currently increasing, not declining”

Are they now? I’ve a few friends who think so too, alas they have yet to have an offer that’s stuck to completion. The market isn’t “falling” but certainly is “falling through” hahahahahahaha

Democrass
Guest
Democrass

” Of course the problem is that prices are currently increasing, not declining.”

Because of seasonality. It will happen every spring. It happened last year and then prices decined in June. Prices will continue declining in June.

Troll
Guest
Troll

@Democrass

The problem is that if the market ends up rising back to where it started dropping in June, and this happens “every spring” then we really have a flat market or at worst a ‘soft landing’.

Green Thumb
Guest
Green Thumb

The Kinder Morgan pipeline is owned by Americans. They don’t care about more tankers.
Why not shut down the existing line and shut down all tanker traffic?

chilled
Member
chilled

I often listen to “The Q” radio station based in Victoria. There seems to be an overabundance of ads for debt consolidation companies these days, much more than I have noticed in the past.

Democrass
Guest
Democrass

“The problem is that if the market ends up rising back to where it started dropping in June”

The data don’t suggest that this is likely (correct me if I’m wrong). My impression is that prices are not rising with any convincing momentum. They are barely rising right now. Last month’s HPI already showed a decline in the rate of price appriciation (if memory serves). Richmond was already back into HPI declines last month.

If someone can spit out a table to show that, it would be appriciated. I don’t keep data.

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