The Rising Cost of Housing: Consider Bankruptcy as an Option in Ontario

Simply paying exacerbated rates to have a decent home has come to interfere with Canadians’ ability to cover other basic costs of living. In addition to not even allowing any wiggle room for expenses anywhere beyond the scope of necessities, it can seem nearly impossible to avoid debt and then, more certainly, to pay off that debt over time.Between 2015 and 2016, housing prices increased by almost 19% in Ontario alone. The large province coupled with British Columbia are certainly leading the charge on the booming real estate market, towering over other provinces’ average housing prices by at least $100,000. At this rate, there is no wonder how Canadian consumer debt has reached over $22,000 per person.

In spite of the expectation that the cost of living continually rises with each generation, the current state of the real estate market has proven to go beyond typical inflation. In Ontario, regardless of whether they are owners or renters, individuals have seen a significant climb in fees just to put a roof over their heads. Toronto one-bedroom rentals are currently costing a median of more than $1,500 monthly, while two-bedrooms are just under $2,000. Meanwhile, the average price of a detached home is selling for over $1 million.One of the primary reasons people choose to rent in the first place is arguably because they cannot afford to buy a home. But if renting is also becoming unaffordable, what option do people have left? This may be the best opportunity to consult with an expert who can offer practical advice to make responsible financial decisions. Bankruptcy trustees in Ontario work with individuals on money management, reviewing your unique circumstances and offering practical debt solutions, from debt consolidation to filing a consumer proposal.

The particularly growing real estate market in Toronto is one of the main reasons the overall statistics have remained relatively high across the country. Our Canadian government has even attempted to intervene on multiple occasions by making mortgage lending stricter to deter heavy debt among borrowers, who are often buying homes they cannot truly afford. In contrast to some expectations of a slowing market, there is no long-term evidence to support this notion in reality.When it comes to dealing with high costs for housing and what may seem like inevitable debt, many people have bleak visions about debt and how they can proceed, even though debt is difficult for many to avoid in the current climate. One perception by individuals with or without financial struggles is that they will always struggle until they file for bankruptcy. However, there are various debt solutions that the Ontario bankruptcy trustees at Harris & Partners Inc. can recommend. In fact, most financial specialists consider filing for bankruptcy to be a last resort.

Read our guide – Can I keep my house and car if I go bankrupt?

When considering the rising cost of housing, it is important to be mindful to select or only keep a home you can actually afford―whether you are living alone, with a partner, or sharing expenses with family members. Take all aspects of your housing into account, including maintenance fees, property taxes, utilities, parking and insurance so you can avoid overextending yourself. Just because homes cost more to buy or rent, does not mean you should overreach.Adjusting your overall spending is one of the simplest methods of dealing with the rise of housing. If a lower budget seems too limiting, you may be able to lower your housing costs by consolidating your loans into one form of debt, such as a mortgage or secured line of credit with a reputable lender. This is another area where a licensed insolvency trustee can offer helpful guidance before you seek out financial institutions from whom to secure a mortgage.

You can also lower your costs by shopping around for the best interest rates. Getting pre-approved for a mortgage before purchasing can also help you to plan for housing within your means. Professionals are available to help you understand your financial portfolio better so you can search for a home within your budget.

Ideally, it is wise to move somewhere you can see yourself long-term and not just for the next year. If you are purchasing a home, obtain a home inspection before finalizing the purchase offer to avoid getting saddled with unexpected and expensive repairs when you thought you were choosing an affordable place to live.