A licenced insolvency trustee in Charlottetown is calling on the federal government to put in measures to help Islanders who are dealing with job loss also deal with their debt repayment and avoid bankruptcy.
"People are stressed and scared, said Walter MacKinnon, who is also vice-president with MNP in Charlottetown.
He said one type of call he has been receiving recently is from people who have made an insolvency proposal that has been accepted. The concern is that if someone misses or falls behind on three consecutive payments, federal legislation requires that the proposal goes into default, which could involve the proposal being reactivated or amended or, in some cases, bankruptcy.
MacKinnon said MNP has reached out to the Office of the Superintendent of Bankruptcy to see if there is any way it can extend the default period from three months to six months – or longer. The parties involved in the debt are not permitted to work out their own arrangement under the current legislation.
By the numbers
Insolvincies in Canada - 2019
- P.E.I. - 364
- Nova Scotia - 2,855
- Newfoundland and Labrador - 1,761
- New Brunswick - 2,519
- Canada - 83,703
Bankruptcies in Canada - 2019
- P.E.I. - 395
- Nova Scotia - 3,244
- Newfoundland and Labrador - 1,501
- New Brunswick - 2,377
- Canada - 57,155
In some cases, clients are being advised to suspend payments or pay what they can "because there's no point in trying to take money that's not there," he said.
The other type of call he's receiving is from people with no income as a result of the current economic climate, such as out of work self-employed persons who are ineligible for Employment Insurance.
MacKinnon's advice is to speak with a licenced insolvency trustee to go over the options.
"We can look at what choices might be the best choice. Maybe it's just hold on for now until we see how long this is going to be. Maybe it's a proposal. Maybe it's bankruptcy," said MacKinnon. "But don't do something too quickly without getting the right information."
The Guardian reached out to the Office of the Superintendent of Bankruptcy to discuss what options it was looking at to help people dealing with job loss and debt. A response to that inquiry wasn't received by press time.