Windsor-Essex Residents Have Tough Time Paying Debt
Residents in Windsor-Essex County are having a tough time paying down debt
According to the latest numbers by Statistics Canada for the second quarter, insolvency rates — someone's inability to pay debt — are up close to eight%.
And while the rates are up, bankruptcies are down 7.4%
Co-owner of Hoyes, Michalos and Associates Doug Hoyes, a licensed insolvency trustee, says the problem is income levels.
"I think our overall debt levels continue to increase and our income levels are not increasing as fast as our debt is increasing," says Hoyes. "Our clients have an income problem much more than a debt problem. You can have a lot of debt, I mean you can have a $500,000 mortgage if you got a job that allows you to make the payments, it is not a problem," he says. "It is not the size of the debt thats the problem, it's can you make the payments."
Hoyes says part of the problem is wage increases.
"We are seeing a lot of salary increase, wage increases that are at or below the rate of inflation if your debt costs are going up above that rate, than you are going to get into trouble," he says., adding, "The overall rate of insolvencies in Windsor is the second quarter was up just under 8%, but in places like Toronto, it was up 18.5%. So Windsor is faring better than a lot of the other big cities in Ontario."
Although interests rates have inched up slightly, Hoyes says the amount of debt people owe, just continues to rise faster than the income.