New numbers show that insolvency and bankruptcy are way down in Newfoundland and Labrador, which one licensed insolvency trustee says could mean filing is on a natural decline after years of an upswing, or people are just delaying seeking help as a result of the ongoing pandemic.
"It's been quite dramatic actually," Sean Stack told CBC News.
"January, February and the first half of March were busier than ever, but since the coronavirus hit, the numbers in Newfoundland have been down 55 to 60-plus per cent each month compared to last year."
According to the Office of the Superintendent of Bankruptcy Canada, 50 bankruptcies were filed in Newfoundland and Labrador in July of this year, as compared to 139 filed in July of 2019.
The total number of insolvencies dropped to 126 in July, from 280 the year before.
Stack said those numbers may seem counterintuitive, given how many people have lost jobs or are working reduced hours as a result of pandemic, but there has been some relief.
"So many things have been deferred. People had their mortgages deferred, their interest payments have been deferred, student loan payments have been deferred," he said.
"For a long time, people weren't working — or they were working from home, so they didn't have to pay the child costs like they might have otherwise had to pay. So there's been a lack of urgency around the financial side of things for a little while."
Whether or not the recent decline in bankruptcy filings means people are generally better off right now, or if they're delaying the inevitable, remains to be seen, said Stack.
Stack said there is a possibility that the number of insolvencies seen in recent years may have simply burned out.
"Maybe it was time for a natural decrease in numbers anyway. Maybe we hit that peak of the summit," he said.
"Or maybe some people are deferring an inevitable insolvency filing. The purpose of these deferrals of mortgages and things was to give people relief, to get back to work, to get back to their income so they could go back to living normally."
Stack said there are still a lot of unknown variables, but he will be watching for a change as the CERB package begins to wind down and some jobs don't return.
He added there could also exist a backlog in insolvencies, where instances such as divorce or illness would normally drive the total.
"We may just be seeing a backlog of those as people come out from the financial hibernation."