seniors trying to start over Archives - Ira SmithTrustee & Receiver Inc.

Seniors in debt or baby boomers in debt, remains a hot topic of conversation and that’s no surprise considering the latest findings. Equifax reports that Canadian consumers continued to increase their debt burdens, but seniors in debt, being consumers 65 and older, had the greatest increase since last year.

According to a new CIBC poll, 59% of retired Canadians say they’re carrying debt. And 19% of those say that their debt level has increased over the past year, while 36% report their debt level has stayed the same. Seniors in debt, defined as those Canadians over the age of 65, have the highest insolvency and bankruptcy rates in the country, according to a report by the Vanier Institute for the Family. Among those retired Canadian seniors in debt, a Harris/Decima poll for CIBC found:

37% are juggling two or more debt payments a month
39% are carrying credit card debt
30% have debt on their line of credit
16% are carrying debt on their mortgage, and
14% have loan debt

As this is a really important issue, we devoted several blogs to seniors in debt – What Do The Golden Years Really Look Like?, Why Are The Majority Of Seniors in Debt?, and Should Seniors Try and Pay Off Their Debt Or Declare Bankruptcy? Another option for seniors trying to start over is a consumer proposal.

Should seniors in debt consider a consumer proposal? Consumer proposals are a very good option for seniors in debt who are retired. Since most people in financial trouble don’t have many assets, the most common reason for filing bankruptcy is to prevent a wage garnishment. Since retired seniors with credit card debt, or other debt, don’t have any wages, there are no wages that could be potentially garnished. And, it is very difficult, if not impossible, for a creditor to garnishee a pension. Therefore a consumer proposal may be the right choice for retired seniors in serious financial trouble. You may also hear the question in layman’s terms: should seniors file a debt proposal to gain protection? What is really meant is one of the bankruptcy alternatives, the consumer proposal.

If you are one of the may seniors in debt experiencing serious debt issues, contact a professional trustee as soon as possible. Ira Smith Trustee & Receiver Inc. will evaluate your individual situation and create a solid financial plan for moving forward so that Starting Over, Starting Now you can live a debt free life and enjoy your retirement. Contact us today.

Watch for our next blog when we’ll be discussing the debt issues plaguing baby boomers.

Last week we discussed whether or not seniors should try and pay off their debt or declare bankruptcy. This week we’ve got some great advice for seniors in debt, seniors with credit card debt, seniors looking for Starting Over, Starting Now.

Seniors in debt is a serious problem that continues to get worse:

According to Statistics Canada, one in three retirees over 55 and two in three over 55 who aren’t yet retired are in debt.
A recent TD Bank study has shown that older Canadians have increased their debt load by 15% (an average of $6000/person) from the previous year. Seniors living in Alberta, Ontario and Quebec had the highest rates of debt accumulation in 2012.
According to Boomers and Retirement, a new survey by TD Ameritrade, the average Baby Boomer is about a half-million dollars short on retirement savings.

The most important piece of advice we can give seniors trying to start over is to eliminate debt! Carrying debt into retirement is a recipe for disaster. Once you retire and begin living on a fixed income you will no longer have the funds required to service the debt; this is especially true for seniors with credit card debt at high rates of interest. Here are 5 tips for seniors in debt:

Postpone retirement if at all possible and pay down as much debt as you can. If working fulltime is not an option, consider part-time work.
Pay down credit card balances as quickly as possible. They are generally the highest-interest loans that seniors carry. You can also call the credit card company and ask for a lower interest rate. They will sometimes agree.
Limit the number of credit cards that you have.
Stay away from debt settlement companies! Consumers are continuing to be taken in by false claims offering to settle your debts for pennies on the dollar quickly and easily. The reality is that when something seems too good to be true, it usually is. Debt settlement companies exist for only one reason – to take your money! They will not help you solve your debt problems. There is no instant or quick fix for serious debt issues.
Protect yourself against fraud and/or abuse. Run away from get rich schemes. There are many scammers out there who have duped seniors out of their life savings and continue to seek out new targets.

As we discussed in Seniors in Debt, Part 3, the right debt relief option you ultimately decide upon will depend on whether or not you have assets, who you owe money to, and how much you owe. For seniors trying to start over there are bankruptcy alternatives – credit counselling, debt consolidation, consumer proposals – which in many cases are better options than declaring personal bankruptcy.

If you’re planning to retire soon or you have already retired and find yourself dealing with serious debt, consult a professional Trustee. Contact Ira Smith Trustee & Receiver Inc. We are a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We can help.