Does age make a difference when it comes to debt?
It turns out that seniors are particularly prone to experiencing insolvency and bankruptcy.
In 2016, the number of senior Canadian families with debt was 42%, a large increase from 27% in 1999.
The median amount of debt per household in 2016 was $25,000, compared to just $9,000 in 1999.
Much of this debt is an increase in mortgage debt, and indeed the level of assets owned by seniors rose during this period too.
However, this increase in mortgage debt might make it more difficult for seniors to manage other debts.
Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation
In 2018, insolvency files for consumers aged 65 and over rose by 0.7%, from 11.2% in the previous year to 11.9% in 2019.
Conversely, insolvency files for people in the 45 to 54 age group declined by 1%.
The rise in senior citizens going bankrupt or filing a consumer proposal may seem like a worrying issue.
However, there are several things to consider when looking at why this change might have occurred.
One issue is that the demographics in Canada are changing.
The population is aging, and there are more seniors in the country than ever before.
In addition, overall debt levels are rising for all Canadians, including those over the age of 65.
We will likely continue to see more seniors filing for insolvency and bankruptcy as Canada’s population gets older and people continue to take on more debt.
However, although the statistics don’t necessarily mean that seniors have a greater risk of going bankrupt, it’s still important to consider the issues that might affect seniors when it comes to debt.
One of the issues previously mentioned is an increase in mortgage debt.
Low-interest mortgages are an attractive prospect that many people have opted for, allowing them to buy a bigger home that they otherwise might not have chosen.
However, if you reach your senior years without having paid off your mortgage, it can become more difficult to keep up with payments, especially with other debts to manage.
Seniors can be on a more restricted income than people who are still working full-time.
Even if your payments are affordable, a single setback could start to make things difficult.
Seniors who are experiencing problems with debt can find ways to tackle their issues.
There are other ways to manage debts and get them paid off, including consolidating and reducing debts to make them easier to pay.
Bankruptcy and consumer proposals can offer useful options when necessary.
They give the option of wiping the slate clean and starting over, although they are not always the right choice for someone struggling with debt.
At Bankruptcy Canada, you can find a Licensed Insolvency Trustee who can advise you on your debt relief options and whether bankruptcy might work for you.
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?