“I work in the financial industry. We have a list of clients with way too much debt who we anticipate will be going bankrupt in the next 1-2 years. Also, we’ve had a few surprises…”

“I’ve had some interesting conversations with clients these last few weeks. I work in the financial industry and we are well aware that several of our clients have way too much debt (yes, a lot of it is bad decisions regarding real estate investments). We have a list of those we anticipate will be going bankrupt in the next 1-2 years. However, we’ve had a few surprises-people who we thought were fine financially are calling up and confessing that they are facing financial problems-credit card debt, loc debt etc. It’s quite surprising to hear from these people that things are not so good after all. In terms of bankruptcies, we’ve seen it coming for a few years now, but it only seems to be about now that people are facing the inevitable. Before they could run through savings, cash out RRSPs, run up that LOC in hopes that things would turn around. But now there is no money/credit left. The end of the line is here, it’s strange how it seems to be coming to so many people at the same time-I would expect to see a flood of bankruptcies over the next two years. I can’t see how the housing market will continue the way it has, people are tapped out now.”
– pricedoutfornow at vancouvercondo.info 10 Nov 2011 10:20am

10 responses to ““I work in the financial industry. We have a list of clients with way too much debt who we anticipate will be going bankrupt in the next 1-2 years. Also, we’ve had a few surprises…””

E.G. | 13 November 2011 at 10:55 am | Reply

You might also be interested in this story from good ol’ California:

http://www.timesunion.com/news/article/Student-housing-was-never-like-this-2266371.php

“Here in Merced, a city in the heart of the San Joaquin Valley and one of the country’s hardest hit by home foreclosures, the downturn in the real estate market has presented an unusual housing opportunity for thousands of college students. Facing a shortage of dorm space, they are moving into hundreds of luxurious homes in overbuilt planned communities.

There are three-car garages, wall-to-wall carpeting, whirlpool baths, granite kitchen countertops, walk-in closets and inviting gas fireplaces.

Not all neighbors are amused.”
- Makaya | 13 November 2011 at 2:25 pm | Reply
  
  you missed the last sentence of the article…
  
  “Everybody on this street is underwater and can’t see any relief,” said John Angus, an out-of-work English teacher who paid $532,000 for a house that is now worth $221,000.
  - vreaa | 13 November 2011 at 3:11 pm |
    
    Painful.
nobody you know | 13 November 2011 at 11:15 am | Reply

I have family members who are financial planners and they were saying the same thing last night. They’re having a hard time figuring out how to turn down referrals from long-term clients. The problem is they’ll have a 50-something couple referred to them and say “make my retirement dreams come true!”. So they look at their finances and realize Mr. and Mrs. Boomer are already ruined and they don’t know it. Too many European river boat cruises and such. Bummer.

So they’ve been politely declining to take them on as clients and suggesting they talk to someone at their bank. As one of them said: “I don’t want my professional reputation attached to their failures”. It really sucks, but the whole room agreed. They’re seeing a lot of people who are maybe 10-15 years away from retirement with basically no savings and no plan. They may be willing to work past 65 but there’s a reason people retire. At some point they’ll just be too damn old to get out of bed every day and compete with their grandchildren for an hourly wage.

“Hello, welcome to Wal-Mart.”
- pricedoutfornow | 13 November 2011 at 12:10 pm | Reply
  
  “They’re seeing a lot of people who are maybe 10-15 years away from retirement with basically no savings and no plan”
  
  Yes, this is the people we’re seeing-those who are in their early to mid 50s and at this age, unbelievably, still have mountains of debt. Though having said that, it’s not just those in this age group who are having financial difficulties (or will be, some don’t know it yet)-there are also those in their 30s who decided a few years ago to “create wealth through real estate” (ie debt). This credit binge has touched many across all ages. I don’t honestly see how many people are going to emerge unscathed from this.
  - nobody you know | 13 November 2011 at 1:39 pm |
    
    – there are also those in their 30s who decided a few years ago to “create wealth through real estate”
    
    It’s the Tom Vu generation. “I used to be loser, just like you! Come to my free 90-minute seminar! “
Beyond Debt | 13 November 2011 at 11:25 am | Reply

“At some point they’ll just be too damn old to get out of bed every day and compete with their grandchildren for an hourly wage.”

And then they get sick and die. Even healthy rich guys like Jobs and Layton can’t escape the ravages of age. J6P Boomers are in for a rude awakening.
Patrick | 13 November 2011 at 11:25 am | Reply

My wife’s friend who is a sushi cook with 850K in mortgages for 2 properties fits the above story to a T. He bought both homes while his wife was out of work since Feb. 2011. Last week he lost his job and now he is up a creek. When my wife said there were 71,700 full time jobs lost in Canada last month he had no clue what she was saying. This looks like the saying: “When your neighbour is out of work it’s a recession but when you’re out of work it’s a depression”.
Airedales | 13 November 2011 at 12:09 pm | Reply

time to sell their over-priced real estate to HAM before the next bankrupt couple do!
Not_604 | 13 November 2011 at 1:04 pm | Reply

Yup…. like we need lots more ignorant HAM’s to solve our self-induced problems.
Can anyone name any company/industry (besides real estate), which has voluntarily established itself in Vancouver and created lots of valuable high-paying jobs to justify such high property valuations?
Why should companies establish themselves in such an outrageously expensive location, when there are plenty of other cities in Canada with far cheaper costs of operation?
Where is future economic growth going to come from to support Vancouver’s astronomical living costs and rapidly aging population?