Debt Relief For Seniors: What Are My Options For Getting Out Of Debt?
Many people in Canada are not prepared for the financial costs of retirement.
About 19% of Canadians have less than $50,000 saved for retirement, while 32% of people nearing the age of retirement (45-64) have not saved a single penny for retirement.
In 1999, only 27% of senior families had debt.
In 2016, this number reached 42%.
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So, how can you get help with debt in Canada if you’re a senior?
We specialize in debt relief for seniors all throughout Canada, and can help you take the right steps toward a debt-free future.
Signs That You May Need Debt Relief As A Senior
Not sure if you need debt relief in Canada?
Here are a few signs that it’s time to consult with a professional to get the help you need.
- You only make minimum payments on credit cards – If you only make the minimum payment on each of your credit cards because you can’t afford to pay more, this is a sure sign that you need professional help. Only paying the minimum on credit cards can result in extremely high balances – and eventually, you may not even be able to afford to make minimum payments on your credit cards.
- Your debt balances keep growing – Whether you keep charging your normal expenses to credit cards, or you take out multiple loans to cover the cost of everyday living, this is a sign that your finances are not in order, and that you need debt relief.
- You have taken out loans to pay your monthly costs – If you have had to take out a personal loan or a line of credit just to pay your mortgage, for example, this is a sign that your finances are in bad shape, and that you need help to get out of debt in Canada.
- You’re thinking about using your RRSP to pay debt – You should NEVER use your RRSP to pay the debt, if possible. Pension plans and retirement plans may seem like a good way to pay down what you owe, but using them to pay off debt prematurely can result in a worse financial situation in the future.
If you recognize one or more of these situations, you may be a good candidate for debt relief as a senior in Canada.
Can I Just Stop Paying My Debts? What Happens If I Don’t Pay?
If you are completely overburdened with debt, you may simply stop paying loans, credit card debt, and even utility bills.
But this is not usually a good way to deal with your debt.
While not paying your debts could be a valid option in some very special circumstances, it’s typically not a good choice for most seniors.
First, defaulting on debts results in serious black marks on your credit report, and will make it harder to qualify for credit or loans in the future.
n addition, if you don’t pay bills like your mortgage or your car loan, your property could be repossessed.
In addition, failing to pay your creditors can lead to harassing letters and phone calls from debt collectors, which can affect your peace of mind and your day-to-day life.
And while your pension plan likely will not be affected by failing to pay your debts, your payments may be garnished when they reach your bank account if your creditors file a court judgment against you.
What Are My Options For Getting Out Of Debt As A Senior?
Wondering what you can do if you are struggling with debt as a senior?
Here are a few of the most common ways that seniors can get debt relief in Canada.
- Work with a credit counsellor to develop a payment plan – A credit counsellor can help you create a budget, learn more about financial planning, and contact individual lenders and creditors to negotiate lower rates. Together, you can develop a payment plan for each debt, and use tools like debt consolidation loans to get yourself on the track toward being debt-free.
- Consumer proposal through a Licensed Insolvency Trustee – A consumer proposal is an alternative to bankruptcy for people who owe under $250,000. A Licensed Insolvency Trustee (LIT) will work with you and your creditors to create a mutually-agreeable proposal for repaying your debt and create a repayment plan that lasts a maximum of 5 years. For seniors who wish to avoid bankruptcy, this method of creating a structured repayment plan is a great option.
- Filing bankruptcy – Bankruptcy should be a last resort if you’re a senior looking for debt relief. However, there are some circumstances in which declaring bankruptcy may be the best way to eliminate your debts, get rid of calls and messages from creditors and debt collectors, and get your finances back on track.
Looking for debt relief as a senior?
Not sure which option is right for you?
Everyone’s financial situation is different, and there’s no “one-size-fits-all” solution for debt relief for seniors.
So contact a qualified professional today, and learn more about your best options for getting out of debt.
Contact Us For A Consultation Now
At Bankruptcy Canada, we’re always here to help Canadians get the answers they need about debt relief.
If you are struggling with debt as a senior, our team of professionals is standing by to give you the assistance you need.
Give us a call now for a consultation, and get the help you need.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?