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THE MODERN RULES OF SENIORS CARRYING DEBT

seniors, seniors carrying debt, seniors in debt, debt, auto loans, bank loans, lines of credit, credit card debt, interest rates, Ira Smith Trustee & Receiver Inc., retirees, starting over starting now, stress of carrying debtSeniors carrying debt becomes the norm

Many Canadian seniors are struggling financially in what should have been a carefree retirement. We’ve done a series of blogs about seniors in debt:

Seniors carrying debt is not going away

However, this problem is not going away. In fact, seniors have now become so accustomed to living with debt that they are using it to finance their lifestyles instead of downsizing or cutting back on expenses. For the time being, seniors are not feeling the stress of carrying debt. Given that retirees and working seniors carrying debt are less likely to be taking steps to accelerate their debt repayment, the problem may very well get worse.

Seniors carrying debt not bothered by it

According to a survey conducted by Equifax for HomEquity Bank:

  • A number of Canadians over 75 are still dealing with a mortgage and their numbers are rising
  • 11.3 million Canadians 55 or older have some sort of debt. Of that figure, about 1.87 million are carrying a mortgage which is up 20% in two years
  • Outstanding mortgage balances are up for every segment of seniors, which for the purposes of the survey was anyone over the age of 55
  • In the 75-and-over category, the average senior with a mortgage had $133,944 outstanding, up 11% from two years ago
  • The number of seniors carrying debt is also increasing in other credit categories, such as auto loans, bank loans, lines of credit and credit card debt

Yvonne Ziomecki, senior vice-president of marketing and sales of HomEquity Bank states, “A lot of people I talk to, they just don’t really care. This is how they manage their finances and they are perfectly comfortable with it”.

Seniors carrying debt need to take action now

This can be a recipe for disaster if interest rates rise. Where is the extra income going to come from? If you’re one of the seniors carrying debt, or anyone else who is relying on credit to support their lifestyle, give the Ira Smith Trustee & Receiver Inc. Team a call before interest rates rise and while you still have options. With immediate action and the right plan we can solve your financial problems and set you on a path to debt free and stress free living Starting Over, Starting Now.

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Brandon Blog Post

CANADIAN HOUSEHOLD DEBT: WE SEEM TO LOVE IT!

household debt, Canadian household debt, how to pay off debt, debt, mortgage debt, interest rates, financial danger zone, credit card, credit card spending, Moneris Solutions, Equifax, auto loans, seniors, trustee, lifestyle, Canadian debt, Canadian economyCanadian household debt at a record high

The ratio of Canadian household debt to disposable income has hit a record high of 164.6%. This means for every $1 of after tax income Canadians earned, they owed nearly $1.65 in credit market debt – mortgages, credit cards and other kinds of consumer loans. The reality is that many Canadians are living in a financial danger zone. They’re walking a financial tightrope where anything like the loss of a job or an increase in interest rates can throw off this delicate balance and plunge them into financial disaster.

Increase is no surprise

TD Bank economist Jonathan Bendiner wrote about Canadian household debt, “The increase came as no surprise. Rising mortgage debt drove most of the growth as interest rate cuts by the Bank of Canada earlier in the year spurred borrowing, especially in the hot housing markets in British Columbia with all the homes for sale in Mission BC and Ontario”. The great concern now is what happens once interest rates rise to more typical levels. How many Canadian will no longer be able to pay their bills or carry their household debt?

5 reasons why for the increase in Canadian household debt

Why is Canadian household debt at an all time high? In addition to rising mortgage debt it may come down to one simple word – lifestyle:

  • Credit card spending rose by 8% this year (Moneris Solutions Corp.)
  • Spending on restaurants and fast food rose by more than 12% (Moneris Solutions Corp.)
  • Home improvement spending soared nearly 10% in the second quarter of the year compared with the same time last year, led by sales of glass, paint, wallpaper and flooring (Moneris Solutions Corp.)
  • Furniture sales are up more than 17% (Moneris Solutions Corp.)
  • Auto loans rose nearly 4% in the second quarter on the back of record vehicle sales (Equifax)

Has income kept pace with Canadian household debt? No!

Unfortunately incomes haven’t increased in the Canadian economy to compensate for the increase in spending and Canadian household debt. A Bank of Montreal report states that approximately 80% of Canadians are in debt and nearly 66% would have trouble affording their household debt if interest rates went up by just two percentage points. Canadians now spend an average 14% of after tax income on their debts. Sadly, the group that’s struggling the most is seniors. According to Equifax, for the first time in five years, 90-day delinquency rates rose among seniors in the second quarter.

What is a person to do?

Are you walking a financial tightrope? If interest rates rise will you be able to afford your household debt? Better yet, would you know how to pay off debt?

Don’t wait for disaster to strike! The time for professional help is NOW. Contact Ira Smith Trustee & Receiver Inc. We’re experts in debt and debt management. We approach every file with the attitude that corporate or personal financial problems can be solved given immediate action and the right plan. Starting Over, Starting Now we can give you financial peace of mind.

Call a Trustee Now!