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Help Senior Citizens Avoid Bankruptcy

5 Tips to Help Senior Citizens Avoid Bankruptcy in Ontario

Are you a senior citizen living on a fixed income and experiencing financial difficulties?

If so, you’re not alone.

The number of retired Canadians that are carrying debt – just like you – is rising.

In fact, seniors are accumulating debt faster than the rest of the population over 18.[1]

And that puts them squarely into the fastest-growing risk group for bankruptcy.

Why are seniors carrying more debt than ever before?

It can be difficult to make ends meet on a fixed income, especially when you account for:

  • The rising cost of living (particularly in Ontario);
  • Family and medical expenses;
  • Credit card debt or mortgages taken prior to retirement that continue on after it – all while your income drops; and
  • Higher than average tax debts (from extra income earned or pension withdrawals).

Where do seniors typically turn when their pension isn’t enough?

Many seniors will rely on high-interest credit cards to pay their bills.

And when they have tapped out those cards, they move on to payday loans.

That’s because payday loan companies lend against pension income like CPP or a company pension.

But these types of loans come with a hefty price. They carry exorbitant interest rates.

Why is bankruptcy a risk for seniors?

Seniors are on fixed incomes that may barely be enough for their necessities, let alone the repayment of high-interest debt or even emergency events, like costly home repairs.

And unlike younger age populations, getting a part-time job to be able to pay off that debt may not be possible due to health issues.

That’s why for some seniors, it can feel impossible to repay their debt.

Is bankruptcy inevitable?

Bankruptcy is one option to handle debt.

It will eliminate most of your debts, and put an end to the collection calls.

However, it’s really considered a last resort.

And depending on when you seek help, it doesn’t have to be inevitable.

Below are 5 tips intended to help seniors avoid bankruptcy.

Tip #1. Get help as soon as you realize you’re having financial difficulties.

If you’re starting to find it hard to pay your bills on time, get started with one – or all – of the below suggestions.

Don’t wait until your debts go into collections. Don’t wait for creditor lawsuits to begin.

Address the issue head-on so you can nip it in the bud before it starts to take root.

Tip #2. Create a realistic budget.

Understanding where you are with your finances is key to your good financial health.

Track your income and expenses so you know what’s coming in every month, and where your money is going.

Then, develop a budget that is realistic.

One you’ve subtracted the necessities from your income, you will see what you have left over to put toward your debts every month.

Tip #3. Contact your creditors.

You may be able to negotiate a repayment plan with your creditors.

Try discussing your financial situation with a manager or supervisor from each company you owe money to.

Keep the particulars noted, including the date and time of the call, the representative you spoke with, and the agreement you came to, and where possible, request written or emailed confirmation of the agreement.

Tip #4. Look for ways to bring in additional income.

If it’s possible for you to safely return to work part-time, this is one great way to get rid of that debt faster.

For many seniors, however, this may not be an option.

So look at any emergency savings you may have put aside. It might make sense to use those savings to pay off your high-interest debt.

But remember, you won’t reach a lasting solution to your debt problem by paying off what you currently owe, unless you change how you spend money going forward.

Tip #5. Contact a Licensed Insolvency Trustee.

This is truly your best option – and it should really be your very first step in seeking debt relief.

Licensed Insolvency Trustees are federally-regulated and licensed professionals authorized to assist you with filing for bankruptcy.

They can also help you with a full range of debt relief options, including every single one of the tips mentioned above.

It can be difficult for the Average Joe to create a budget that actually works, negotiate with creditors, or find ways to make extra income to pay that debt off.

A Licensed Insolvency Trustee is an immeasurable help in getting you out of debt.

Contact a Licensed Insolvency Trustee Today

At your initial, free consultation, we’ll look at your financial circumstances and detail your debt relief options and their pros and cons. We’ll also give you our seasoned advice on which solution may be best for you and your family.

Our mission is to help you achieve the debt relief you seek. And remember, the sooner you contact us, the more options you may have available. Bankruptcy does not have to be inevitable. Call us today to make an appointment.


Photo by Cristian Newman on Unsplash

John Adamson, CPA, CMA

John is a Licensed Insolvency Trustee (1994), a Chartered Insolvency and Restructuring Professional (CIRP – 1994), and a Chartered Professional Accountant with a Certified Management Accounting designation (CPA, CMA – 1992). His experience includes more than 25 years of helping individuals, small businesses, their owners and even lenders, find solutions to their debt problems.

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