Big toys filling repo business floor

An increasing number of Calgarians can't afford to make payments on some of the big toys that have come to symbolize wealth in the province, says one local repo company.

More and more motorcycles, snowmobiles and high-end SUVs seized from Alberta owners who couldn't pay the bills are up for sale at Calgary Repo Sales, said owner Marvin Boman.

"We've experienced a huge influx in business in the past two months," he said. "We're absolutely over-capacity as far as square footage to park repossessed assets, foreclosed assets."

In July, 494 Albertans and Alberta businesses declared bankruptcy, 24 per cent more than in the same month a year ago.

Between July 2007 and July 2008, Alberta experienced ain bankruptcies, according to the Office of the Superintendent of Bankruptcy in Canada. In July, 494 Albertans declared bankruptcy.

Calgary credit counsellor David Smith said he is also seeing an increase in home foreclosures.

"People [who] a year ago could have refinanced their house to deal with outstanding credit now don't have equity in their home, or they did refinance two years ago," Smith said. "Those second mortgages are up for renewal, and the property is worth less now, and they're not able to renew."

Calgarians who were relying on equity to handle their debts are hitting a wall, said Smith. The average price of a single family home in Calgary in August 2008 was $440,625, a decrease of 9.32 per cent from the previous August.

"Some people, justifiably, were thinking they'd hit a home run by investing in real estate," said Smith. "So they were doing quite well, but now, they're caught with two and three properties that they're trying to sell, and it has put them in a very bad financial situation."

He expects more people will have financial problems and file for bankruptcy in Calgary this year than have over the past several years.