Canadian Press (OCT 28/96) - Interest rates may be falling and the economy may be gradually improving, but Canadians are going broke in record numbers.
Consumer bankruptcies were running 23 per cent higher than lastyear as of August, Industry Canada says.
The department's bankruptcy bureau said 52,012 Canadians had walked away from their debts by the end of August.
That's up from more than 42,000 at the same point of last year.
Gilbert McMullen, executive director of Ottawa Credit Counselling Services, said in an interview he doesn't see individual bankruptcynumbers getting better until the end of next year.
The reason? Too many people are living off their credit cards.
The current situation, he said, is the logical extension of spending habits developed in the 1980s and never put under control in the 1990s when incomes could no longer rise with people's appetite for credit.
"We're seeing people who held off (bankruptcy) for years and in the early '90s began charging everything, and now they have to live," McMullen said.
"It's scary the amount of credit people have."
David Rosenberg, senior economist at Nesbitt Burns, said consumers have an adjustment coming much like governments of all levels have gone through with debt.
"Let's face facts. There is no quick fix," Rosenberg said.
"The rapid growth of the '80s was built on a foundation of debt at the consumer and the government level."