An increasing number of Canadians are entering retirement with large amounts of debt and facing bankruptcy. Learn why and how to get out of debt before it’s too late!
More and more retirees are struggling with debt that threatens their golden years. Forced to make minimum monthly payments on a fixed income, many are finding themselves in a place they never saw in their worst nightmare: bankruptcy. This is quite a phenomenon that Canadians are still trying to grasp, and it threatens to undermine hopes of living out this season of life in comfort. As debt levels rise across the nation, it is possible that your mother or father will retire with debt still hanging over their heads. It is a position they never dreamed they would be in and at a very vulnerable time of their lives.
Reasons Seniors Face Insolvency
Unmanageable debt is here, and it is the elderly population that shows the seriousness of the debt stress. The issue has increased exponentially over the past few years with almost 20% of retirees still paying for mortgages, and many more are in credit card debt.
There are a variety of reasons that the aged are in this situation, including:
Health issues are creating expensive medical bills.
Lack of dental coverage resulting in using credit cards to pay for procedures.
Adult children who are struggling to get on stable financial footing.
Lack of computer literacy, thereby unable to manage finances online.
Poor financial literacy is leaving them vulnerable to ill-willed financial advisers.
Sudden illness or detrimental medical diagnosis rendering them unable to work.
Outliving their retirement savings.
Steps Retirees Can Take to Get Out of Debt
While the financial news may seem dim, there is hope. While ignoring the situation may feel like an option, it can leave you additionally stressed as creditors continue to call and send letters. Talking with a licensed insolvency trustee at a credit counselling agency provides the different options available based on your existing situation. Here are a few that can get you the debt help you need to get back on your feet and restore your financial well-being:
Debt Consolidation– The bank pays off your creditors with one loan. You are left with one monthly payment. This option works better for those with an excellent credit rating and plenty of income to repay the loan.
Credit Counselling – Speak to a professional advisor to create a repayment plan according to your existing debts. As long as the creditors agree, you will pay the counsellor your monthly payment, and they will disburse it.
Consumer Proposal – This is a legal binding agreement that allows you to pay less than you owe to your creditors. A licensed insolvency trustee will administer the plan on your behalf. You pay a percentage of what is owed in five years or less.
Bankruptcy – This is only a last resort choice and should not be rushed into. Your non-exempt assets will be retained, your income will have to be reported monthly to the trustee, and you may have to make additional payments from that surplus income. It can take 9 to 36 months before you receive a discharge.
To assess the best route for your situation, it makes sense to talk with a licensed insolvency trustee. They can discuss your options and help you make a plan to get back on your feet while satisfying your obligations to your creditors.
Contact us today at D. & A. MacLeod for debt help and credit counselling. We can help you get back to enjoying your golden years and headed back into financial security.