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WILL I EVER BE ABLE TO RETIRE?

will i ever be able to retireWill I ever be able to retire?” is a common question amongst the Boomers generation. Last week we discussed the problem of living paycheque to paycheque. This week we’ll be addressing whether or not you will ever be able to retire. That’s right; there is a distinct possibility that many of you may never be able to retire. A new HSBC study reports that 17% of Canadians believe that they will never be able to retire, while a growing number of Canadians believe that retirement is getting further and further away and therefore the answer to their will I ever be able to retire question is NO.

  • 40% say they did not prepare well enough and of that group that doesn’t have enough money, 40% only came to the realization after they retired
  • 72% of retirees experienced a fall in income, yet only 48% had a similar drop in spending
  • 14% of people were funding a dependent in retirement while 32% of people not fully retired made the same claim

A BMO study reports that Baby Boomers are about $400,000 short of their retirement goals. Another reason why the answer to their will I ever be able to retire question is no. The money has to come from somewhere and as a result the BMO survey reports that:

  • 71% of Boomers plan to work in retirement and therefore feel that the answer to the will I ever be able to retire question will never be yes
  • 44% will sell off their valuable goods such as antiques or possessions they don’t use in order to raise funds otherwise the answer to their will I ever be able to retire question will never be yes
  • 33% plan to sell their home to help make ends meet otherwise the answer to their will I ever be able to retire question will always be no

According to Sun Life Financial’s annual Unretirement Index poll:

  • Only 27% of respondents believe they’ll retire by 66, a nearly 50% decline from the previous year
  • Economic uncertainty and poor financial planning are being cited as key reasons why a majority of Canadians surveyed say plans to retire by age 66 are more of a fantasy than a reality and their answer to the will I ever be able to retire question is no

Are you one of the many Canadians who haven’t been able to save for retirement? Is life a financial struggle to pay the monthly bills? Are you relying on credit to maintain your lifestyle? Are you forced to use expensive credit, such as an online bad credit loan or a bad credit line of credit? Do you feel that it is no longer worth spending your time thinking about the will I ever be able to retire question because your reality is too depressing?

If so, you are living in a financial danger zone. Consult a professional Trustee as soon as possible. Contact Ira Smith Trustee & Receiver Inc. for sound advice and a realistic financial plan to turn your life around. Starting Over, Starting Now we can solve your financial problems and put you back on track to living a debt free life. We want to help you answer a resounding YES to your will I ever be able to retire question.

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ARE YOU LIVING PAYCHEQUE TO PAYCHEQUE?

starting over, staring nowWe’ve been discussing the serious issue of seniors in debt, but seniors are not the only ones experiencing serious financial challenges. Those of us still working are facing different, but equally daunting challenges.

You have a job and you work hard. You pay all of your bills on time and you pay your taxes. What could be wrong with this picture? You could be one missed paycheque from financial disaster. A recent report shows that Ontario has the second highest percentage of people living paycheque to paycheque in the country.

A Canadian Payroll Association (CPA) survey found that the majority of Canadian workers continue to live paycheque to paycheque, with 57%saying they would be in financial difficulty if their pay was delayed by even one week. Although a financial planner will generally recommend that people have approximately three months of expenses as an emergency fund, if you are living paycheque to paycheque, survival is on your mind; not saving. And, the reality is that retirement may be just a dream – 43% of Ontarians expect to postpone their retirements.

How did so many people end up living from paycheque to paycheque?

  • Rising cost of living expenses
  • Living expenses now include Internet, cable, cellphone/Smartphone, wireless data…
  • Increasing educational costs
  • Unstable economy
  • Easy access to credit contributes to overspending

What can you do now to end the “living paycheque to paycheque” cycle? Don’t wait for financial disaster to strike! Contact a professional Trustee today. Ira Smith Trustee & Receiver Inc. will evaluate your situation and come up with a solid financial plan so that Starting Over, Starting Now you can get your life back on track. You won’t ever have to experience the stress of living paycheque to paycheque again.

Watch for our next blog when we’ll be discussing if you’ll ever be able to retire.

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ADVICE FOR SENIORS WITH CREDIT CARD DEBT-SENIORS IN DEBT, PART 4

debt, seniors in debt, bankruptcy, personal bankruptcy, trustee, bankruptcy alternatives, credit counselling, debt consolidation, consumer proposals, insolvency, restructuring, starting over starting now, seniors trying to start over, seniors with credit card debtLast 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:

  1. 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.
  2. 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.
  3. Limit the number of credit cards that you have.
  4. 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.
  5. 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.

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SENIOR CREDIT CARD DEBT RELIEF OR DECLARE BANKRUPTCY-SENIORS IN DEBT, PART 3

senior credit card debt relief, should seniors file a consumer proposal, bankruptcy, personal bankruptcy, declare bankruptcy, trustee, bankruptcy alternatives, bankruptcy process, credit counselling, debt consolidation, consumer proposals, wagesLast week we discussed why the majority of seniors are in debt. This week we’ll be addressing if seniors should try and pay off their debts to obtain senior credit card debt relief or declare bankruptcy.

Life is very difficult for many seniors who anticipated that their golden years would be a carefree retirement. Instead, according to the Vanier Institute for the Family, Canadians over the age of 65 have the highest insolvency and bankruptcy rates in the country. With increasing expenses and a significantly reduced income and return on investments, more seniors are contemplating bankruptcy; but is it the best and/or only option?

While it’s true that bankruptcy can eliminate many of your debts, people typically file personal bankruptcy as a means of protection from creditors. If you are working, bankruptcy will protect you from creditors garnisheeing your wages. However, if you are retired and your sole source of income is your pension, then there are no wages to garnishee. It is very difficult for a creditor to garnishee a pension with one notable exception. If you owe the CRA (Canada Revenue Agency) for unpaid taxes, they are permitted to garnishee all types of pension income under Section 224.1 of the Income Tax Act. It is rare that the CRA will garnishee your pension income, but it is a possibility. If you have a significant tax debt and the CRA has threatened a pension garnishment, the bankruptcy process is an option that has to be considered.

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 in debt there are bankruptcy alternatives – credit counselling, debt consolidation, consumer proposals – which in many cases are better options than declaring personal bankruptcy. In our next blog, we will be considering various options, including should seniors file a consumer proposal?

Unfortunately too few Canadians are properly prepared for the financial reality of retirement. They get caught up in a downward financial spiral and some pass away leaving significant debt. The family is then left with the unpleasant options of paying the debt themselves or bankrupting the estate. If you are a senior in serious debt, consult a professional Trustee as soon as possible. Contact Ira Smith Trustee & Receiver Inc. for professional advice and an action plan that’s right for you. Starting Over, Starting Now we can give you the help that you need to deal with your financial problems, and peace of mind.

Watch for our next blog when we’ll be discussing some advice we have for seniors in debt.

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HELP FOR SENIORS IN DEBT-SENIORS IN DEBT, PART 2

help for seniors in debt, seniors in debt, debt, debt management, bankruptcy, trustee, trustee in bankruptcy, sandwich generation, grey divorce, seniors with credit card debt

Last week we discussed “What Do The Golden Years Really Look Like”?This week we’ll be addressing why the majority of seniors are in debt and provide help for seniors in debt.

Seniors are facing a myriad of financial issues that have made their anticipated “golden years” anything but golden.

  • The Sandwich Generation: Many are still part of the “sandwich generation” a phenomena caused by delayed marriage, postponement of children, and adults with increasingly long-lived parents. They’re borrowing to help their children, grandchildren and parents. As long as they have collateral and a good credit rating, banks will readily lend them money.
  • Grey Divorce: According to Statistics Canada, divorce among couples 65 years of age and older is becoming more common and grey divorce can create serious debt for boomer retirees.
  • Recession: Battered financial markets and anaemic economic growth have forced Canadians to make debt management and not retirement the primary focus of financial planning. Their investment returns may have been decimated by the recession and they borrowed hoping markets would stabilize.
  • Lifestyle Choices: Even though they’ve reached 65 and their incomes have been greatly reduced, they continue to live the same lifestyle that they lived prior to retirement. With reduced incomes, often coupled with increased expenses, they are accumulating more debt to boost income through credit so that they can continue to enjoy a pre-retirement lifestyle they may no longer be able to afford. Seniors with credit card debt adapt by making only the minimum monthly payments on credit cards, which leads to a downward debt spiral, a journey that often ends with a trip to a trustee in bankruptcy.

The problem with carrying debt into retirement is that it must be serviced with less income than when working full-time. Mid-career people can start over, but retirees can‘t. If you are now facing serious debt issues contact Ira Smith Trustee & Receiver Inc. We can help you get your life get back on track. Starting Over, Starting Now you can take the first step towards an enjoyable retirement. Watch for our next blog when we’ll be discussing if seniors should try and pay off the debt or declare bankruptcy.

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CANADIAN SENIORS IN DEBT, PART 1 – WHAT DO THE GOLDEN YEARS REALLY LOOK LIKE?

Canadian seniors in debt, seniors in debt, debt, Freedom 55, bankruptcy, insolvency, financial freedom, trusteeHow did you imagine retirement? A paid off house or condo, winters in Florida, summers on the golf course? You may be one of the fortunate few that actually get to live this retirement dream, but the reality that many seniors face is bleak. Sadly many Canadian seniors in debt are finding themselves drowning in debt without enough income to pay it off.

  • 1/6 of seniors report that they owe more than $100,000. Statistics Canada
  • 59% of retired Canadians say they’re carrying debt. And 19% of those say that their debt level has increased over the past year. New CIBC poll
  • Canadians over the age of 65 have the highest insolvency and bankruptcy rates in the country. Vanier Institute for the Family
  • Average debt for consumers aged 65 and over climbed 6.5% over the past year, the biggest year-over-year increase in the period for any age group. Equifax
  • Canadians are entering retirement more indebted than ever. Toronto-Dominion Bank Economic Overview Report dated February 13, 2013
  • Half of Canadians say they are not financially prepared for their retirement. CIBC 2012 Poll

 

What happened to the Freedom 55 pipe dream that we bought into? The Freedom 55 concept is 29 years old. It was a clever marketing plan that was established in 1984 after consumer research revealed that Canadians were becoming increasingly concerned about their futures and retirement plan. For today’s seniors Freedom 75 may be closer to reality, but reality isn’t nearly as attractive as the fantasy of an early retirement and financial freedom.

If you are experiencing serious debt problems contact Ira Smith Trustee & Receiver Inc. today. We can help. Starting Over, Starting Now you can take your first real steps to financial freedom. Watch for our next blog – Seniors in Debt, Part 2 – when we’ll be talking about why the majority of seniors are in debt.

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IF MY EX DECLARES BANKRUPTCY, HOW WILL IT AFFECT ME?

joint accounts, divorce, bankruptcy, bankruptcy process, bankruptcy and insolvency act, debt, trustee, divorce and bankruptcy,ex declares bankruptcyIn last week’s blog we talked about Divorce And Bankruptcy – Which Comes First? Sadly, divorce and bankruptcy are indelibly intertwined. The number one reason couples get divorced is financial issues and 1/3 of all people in Ontario facing bankruptcy are there because they are also going through a divorce or a separation. The issue of divorce and bankruptcy is a potential minefield and there are many issues that can arise if you are already divorced and your ex declares bankruptcy.

Will I still owe for debts and credit cards that I co-signed with my ex? Unfortunately, yes. You will be held responsible for any debts that you did sign for. In fact after your ex files for bankruptcy he/she will no longer be responsible for the debts, but the debts for any loans and credit cards will be 100% yours.

My divorce decree assigned the debts to my ex, so why are the creditors coming after me for payment? A divorce decree is a legally binding agreement between you and your ex but it in no way binds any creditors. If you’re a co-signor with your ex on a debt acquired while married, the creditor can require the entire payment of that debt from you even though the divorce decree assigns the full debt to your ex.

Will my ex’s bankruptcy affect my credit score? Your ex’s bankruptcy process can affect your credit score if:

  • You and your ex still have joint accounts
  • You are now responsible for debts that you co-signed for

What will happen to my alimony and child support? The good news is that any support – alimony or child support is non-dischargeable (the debt can’t be eliminated) in bankruptcy by the Bankruptcy and Insolvency Act. However, as a result of the bankruptcy process, if your ex is having trouble in making these payments in full and on time, there will be an obvious affect.

If you’re experiencing serious debt problems, contact Ira Smith Trustee & Receiver Inc. as soon as possible. There is help available and Starting Over, Starting Now we can help you to live a life that is not consumed by financial stress.

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MARITAL BREAKDOWN AND BANKRUPTCY: WHICH COMES FIRST?

Bankruptcy, bankruptcy and divorce, Bankruptcy and Insolvency Act, bankruptcy faqs, Consumer Proposal, credit counselling, Debt, debt consolidation, debt relief, divorce, family law, if my ex files bankruptcy how will it affect joint accounts, if my ex files for bankruptcy how will it affect joint accounts, marital breakdown and bankruptcyJust like the old conundrum, “which came first; the chicken or the egg” how would one answer, marital breakdown and bankruptcy: which comes first? It has no definitive answer because excellent arguments can be made for both sides. The same holds true for “divorce and bankruptcy; which comes first”?

Each case has to be decided upon its own merit. Although marital breakdown and bankruptcy, and bankruptcy and divorce, often go hand in hand, marital breakdown doesn’t always lead to divorce if the marriage can be salvaged. As family and parental rights lawyers UT have made clear, bankruptcy and divorce are two separate legal processes that can be at odds with each other.

There are however a few indisputable facts:

  • The number one reason for marital breakdown and couples getting divorced is financial issues. Divorce.com
  • In a recent study one out of every seven people who declared bankruptcy in Canada listed separation, divorce or marital breakdown as a contributing factor to their financial problems.
  • One-third of all people facing bankruptcy are there because they are also going through marital breakdown and divorce in Ontario or a separation. Gail Vaz-Oxlade
  • Bankruptcy doesn’t eliminate all divorce debts. E.g. It does not eliminate alimony or child support.
  • Declaring bankruptcy on joint debts, even debts in divorce, will impact the other borrower.

If causing the least disruption on the children of the family during a marital breakdown and bankruptcy is of prime importance to the spouse with the debts (and presumably that will be the same as the spouse making the support payments), it makes sense to have at least the support provisions of the divorce proceedings agreed upon, including the making of the support order and then file for bankruptcy. Marital breakdown and bankruptcy process will not disturb any bona fide arrangements for support, but keep in mind it will affect property not already dealt with by the family law court.

One such area comes up in this common question: “If my ex files for bankruptcy how will it affect joint accounts?”. Family law proceedings are the one area of provincial law that is left relatively untouched by the Bankruptcy and Insolvency Act, which is a federal statute. However, the Supreme Court of Canada has confirmed that in Provinces that are an equalization jurisdiction (as opposed to a division of property jurisdiction), in a unanimous decision, the court upheld defining equalization payments as debts that are a claim provable in bankruptcy, meaning they are wiped off a person’s slate by the bankruptcy process.

Marital breakdown and bankruptcy is an extremely complicated process, made even more complicated when combined with divorce and requires the expertise of a licensed Trustee to work with your family lawyer to assess your individual situation and provide practical solutions and an action plan. If you have serious debt problems, are contemplating bankruptcy and divorce, or just wish to know more about marital breakdown and bankruptcy, just in case, check out our bankruptcy faqs and then contact Ira Smith Trustee & Receiver Inc. as soon as possible. Starting Over, Starting Now we can help you get your life back on track, even with marital breakdown and bankruptcy looming. Watch for our next blog when we’ll be addressing more issues related to marital breakdown and bankruptcy, and divorce and bankruptcy.

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FAMOUS CELEBRITY BANKRUPTCIES HAPPEN TOO

bankruptcy. bankrupts, debt free, financial problems, financial stress, trustee, robin williams bankrupt, ed mcmahon, ed mcmahon bankrupt, robin williams, bankrupt, rich and famous, celebrity bankruptcies

Most of us look at the rich and famous and wish we could live their lives. We see multi-million dollar mansions, driveways full of Porches, Maseratis, Jaguars, and Bentleys, exotic vacations on magnificent yachts and private islands, and private planes. Who wouldn’t want to live that lifestyle? But, there is a deep, dark secret – many of these high flyers can’t sustain the income to fund these lifestyles and like many mere mortals, go bankrupt. Famous celebrity bankruptcies happen too. Here are some of the more rich and famous bankrupts:

Samuel Clemens – “Mark Twain”Michael Jackson
Abraham LincolnDorothy Hamill – Gold Medal Skater
Johnny Unitas – Football Hall of FameMilton Hershey – Founder Hershey’s
H.J. Heinz – Founder HeinzMarvin Gaye
Mick Fleetwood – Fleetwood MacWalt Disney
Larry KingBurt Reynolds
PT BarnumTom Petty
David CrosbyDionne Warwick
Ed McMahonHenry Ford
M.C. HammerLarry King
Toni BraxtonNatalie Cole
Robin Williams

 

  • 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce within two years of retirement.
  • The National Endowment for Financial Education says that 70% of all people who suddenly receive large amounts of money will lose it within a few years.

We believe that if someone earns a lot of money, that makes them wealthy; but that is far from the truth. If these high earners are spending as much as they make or more, they are on a path to disaster. Many people that you consider to be wealthy are living from month to month. The truth is that high earners and low earners alike can be irresponsible about money. Managing money wisely, living within your means, saving, and budgeting are the necessary elements to living a debt free life.

Bankruptcy is not a shame; it’s a fact of life and everyone can be touched and affected by it. It’s never too late to live a financially healthy life. If you’re experiencing serious financial problems, contact Ira Smith Trustee & Receiver. We are here to help put you on a path to debt free living.

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DEBT AND DEATH – DON’T LET YOUR DEBT HAUNT FUTURE GENERATIONS

debt and death, debt, credit card debt, bankrupt, credit report, trustee, toronto bankruptcy, insolvency, Bankruptcy and Insolvency ActDeath and taxes are certain; but serious debt is optional. The importance of budgeting and living debt free cannot be overstated. In our last two blogs – Is the Ultimate Indignity to Bankrupt a Deceased Person Part 1 and Part 2, we discussed the problems that can arise when there is debt and death. Sixty-seven percent of Canadian adults don’t understand what will happen to their debt when they die, according to a recent survey from the Lawyers’ Professional Indemnity Company. Don’t let your debt haunt future generations. Of course there are times when disaster strikes – serious illness, unexpected loss of a job, divorce – but most serious debt is directly related to consumer spending. According to BMO:

  • 59% of Canadians recently surveyed say they shop to cheer themselves up; mood-lifting impulse purchases cost Canadians $3,720 a year.
  • Canadians plan on spending an average of $3,073 on summer travel this year. People can get carried away on a trip and splurge on things they would never otherwise spend on.
  • Technology sucks people into to spending on the latest and greatest innovation; whether or not they need it.

Almost 50% of Canadians who have credit card debt say they always or often carry an outstanding balance, according to a survey by Harris/Decima. It may surprise you to know that 1 in 20 Canadians report that they will never be able to fully pay off the debt.

Debt can have far reaching effects, but it’s something that we don’t often stop to think about in the course of living our lives. In addition to affecting your ability to borrow, did you know that:

  • You can be turned down for a job because of negative items on your credit report.
  • The stress of serious debt can create a myriad of health problems.
  • One of the major causes of the breakdown of marriages is serious debt.

Starting Over, Starting Now you can make the changes in your life required to live a debt free life. If you are overwhelmed by serious debt, contact Ira Smith Trustee & Receiver Inc. today. We can help.

Call a Trustee Now!