Senior Citizens, Debt Issues & Filing Bankruptcy in Canada
Debt problems can affect people of any age, so whether you’re young and in the prime of your life, or an older citizen and past retirement age, you might still consider the debt relief options available to you.
Here at Bankruptcy Canada, we can provide you with the help you need.
Be it a consumer proposal, bankruptcy, or a method of debt consolidation, a licensed insolvency trustee will talk to you about your needs and discuss the best way forward for you.
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Senior Citizens And Bankruptcy
If you’re a senior citizen, bankruptcy is one option that is available to you if you’re struggling with debts while living on a fixed income.
You might be past working age, and reliant solely on your pension and savings.
Financially, you will have a number of expenses, including property taxes, utility bills, food and other living essentials, and perhaps medical bills too.
If you can’t make ends meet because of your debts, then you should consider bankruptcy as one of your debt relief options.
That doesn’t mean other solutions aren’t open to you, but it’s worth talking to one of our licensed insolvency trustees to learn more about your various options.
Are There Reasons Why Bankruptcy Might Not Be The Best Option?
In some circumstances, yes, there are reasons why bankruptcy might not be the best option for you.
Your creditors might not be able to take legal action against you
Most people go bankrupt to escape the demands of their creditors, as the mental stress they are placed under can be unbearable when monetary demands arrive via post, email, or telephone calls.
As a senior citizen, you are at a slight advantage, as in most cases, creditors will be unable to garnishee your pension.
So, in this instance, you might not need to file for bankruptcy to seek protection from your creditors.
This doesn’t mean they won’t stop calling you, but they will find it harder to take legal action against you for not repaying your debts.
You should still make an effort to pay back your debt, of course, but in this situation, you might decide against bankruptcy as the way forward.
You could consider a consumer proposal
You might also decide against bankruptcy if there are other ways to manage your debt problem.
If you could sell some of your assets, you could raise the money necessary to pay back your creditors.
You might also work with a licensed trustee on alternative debt-relief solutions.
A consumer proposal, for example, could work for you if you are able to pay back some of the money owed.
By paying back less each month, you would have less financial stress, and you wouldn’t have to worry about your creditors hounding you for more money.
With a consumer proposal, you would only need to pay back some of your debt, so financial freedom can be afforded to you sooner rather than later.
You could sell or refinance your home
If you were thinking of downsizing, it might be that some of the money from the sale of your home and surplus assets could go towards paying off your debts too.
A smaller home can also mean reduced property taxes and cheaper utility bills, so you would have more scope to save money and perhaps a greater ability to pay off more of your debts.
Alternatively, you could refinance your home with a traditional second mortgage or a reverse mortgage.
You could then utilize some of the equity in your home to pay off your debts.
A second mortgage can also mean reduced interest payments if you find a good deal, so you might be able to pay off more of your debts if some of your income was freed up to cover them.
You don’t like the idea of bankruptcy
You might not like the idea of bankruptcy because of the stigma attached.
You might also be worried about the effects bankruptcy will have on your credit score.
So, if there were other options available to you, you might decide against bankruptcy for these or other reasons.
Again, a licensed insolvency trustee will talk to you about the options that are available, and if other routes towards debt relief can be made available to you, then these will be explained in detail
When Is Bankruptcy The Right Way Forward?
In some cases, bankruptcy can be avoided.
However, there are still reasons as to why you might consider filing for bankruptcy.
You should consider the option if you can’t afford the consumer proposal
With a consumer proposal, you will make reduced payments to your creditor.
However, if you still can’t afford to make these payments, perhaps because you would still struggle to cope financially while paying your monthly instalments, then clearing your debt in its entirety would give you the ability to start afresh financially.
You should consider the option if your retirement is in jeopardy
Thankfully, under bankruptcy law, your retirement savings are protected, so they won’t be taken away from you if do go bankrupt.
Your RRSP contributions are also protected, other than those that have been made within the last year.
This means you will still have some financial freedom after bankruptcy to enjoy your retirement.
The alternative is using your savings to pay off your debts, but this isn’t the best way to enjoy your twilight years, as you will have less ability to do the things you had always hoped to do after retiring.
So, rather than seeing bankruptcy as a burden, you might consider it a lifesaver if no option is available to you.
At Bankruptcy Canada, we are dedicated to helping you find financial freedom and debt relief.
No matter your age or situation, contact us today if your debt is overwhelming you.
Call us at (877) 879-4770 or complete this form to arrange a free consultation with one of our trustees.
The sooner you get in touch with us, the sooner you will be free of your financial burdens.
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