Bankruptcies warrant close attention
Trustees visit once a month for counselling

by Nancy Gardiner
Northern News Services

NNSL (Mar 05/97) - Last month, 21 people in Yellowknife met with a bankruptcy trustee to discuss their options.

Eight of them will likely file for bankruptcy, says Renee Legge, assistant estate manager with Browning Smith Inc. of Edmonton.

The firm travels to Yellowknife once a month to meet with people in financial difficulty.

She says small businesses seem to be bearing the brunt of bankruptcies, while larger ones are faring better.

On her trip here last month, Legge saw "lots of personally related or sole proprietorship troubles."

Most of the trouble is in the form of credit-card debt and personal bank loans. "People can't seem to make ends meet in Yellowknife with the high cost of living," she says.

Lots of the people she counselled came to Yellowknife from other provinces.

"They had difficulty paying their old bills and meeting new their new debts," explained Legge. Most have overextended for the incomes they have. And many have already tried consolidating their loans.

Many of the people she met with had families with two or three children and only one spouse working.

"You tend to need two incomes to make ends meet in Yellowknife," she said.

The only way out of bankruptcy is to pay creditors in full, she says. Once bankruptcy is filed, a person must remain bankrupt for a minimum of nine months.

During that time, the person must attend two financial counselling sessions, submit monthly statements of income and expense and pay a fee of $1,500.

Bankruptcy will show on a person's credit rating for seven years, but often, if that person shows he can pay a debt, he may be extended credit again, says Legge.

Legge and Lee Browning were in Yellowknife last month. A return visit is planned for March 19 and 20.

The firm has been providing services to Yellowknife for the past five years.

Legge's advice to people is to see someone immediately if they're in some financial difficulty. "It would save a lot of stress."

She says anyone who owes more than $1,000 and can't make their payments can file for bankruptcy.