Meet Hanna and Jim, a senior couple from Waterloo (not their actual names).
Senior debt has become an alarming trend that puts more and more people at risk.
With over $100,000 debt in credit cards and lines of credit Hanna and Jim’s retirement plan backfired horribly.
They were looking forward to their silver years to retire and relax.
However, the pension income isn’t enough to cover their living costs and their debts.
As a result, the couple is still working part-time to make ends meet as much as possible.
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They have had to forget about their dreams of spending quality time with their children and grandchildren, travelling the world, and enjoying a comfortable lifestyle with their savings.
Unfortunately, their debt situation means that Hanna and Jim still have a mortgage to pay.
How do seniors like Hanna & Jim accumulate debts?
Nowadays, one in five seniors is in debt.
It has become a common situation for a lot of reasons.
Seniors spend large amounts of money to help their children and grandchildren, which can compromise their savings.
Hanna and Jim admitted that budget management wasn’t their forte, which means they didn’t track their expenses and didn’t design any saving plan.
Therefore, they fell into the trap of spending too much on leisure and unbudgeted activities.
With no overview of their financial situation, they rapidly accumulated debts.
Hanna and Jim also relied mainly on credit, which made debts overwhelming.
What can Hanna & Jim do?
The Waterloo-based couple first met a licensed insolvency trustee a coupe of years ago.
At the time, they were worried about discussing their financial issues.
They had little experience in talking about money problems.
They also believed that seeing a trustee meant admitting failure with their finances.
However, the first step to recover from your debt is to trust a licensed insolvency trustee with the details of your financial problems.
The trustee can recommend a variety of alternatives.
In the case of Hanna and Jim, the trustee supported a consumer proposal to help them pay off their credit debts and protect their home.
Why is a consumer proposal a good option?
A consumer proposal let Hanna and Jim pay off their mortgage and keep their home.
The bankruptcy would have meant surrendering the home to pay off their creditors, which Hanna and Jim didn’t want.
Additionally, with a consumer proposal, the senior couple can repay their debt partially.
However, Hanna and Jim initially rejected the proposal because they felt that they couldn’t forgive themselves for the debt if they couldn’t repay it in full.
Our trustees find that sometimes similar mental blocks can affect clients on their paths to debt freedom.
It took the Waterloo couple almost two years to reconsider their situation and file a consumer proposal.
During that time, they tried to get out of debt by themselves until they were ready to accept they couldn’t repay the debt in full.
Many people need to process their debt relief solution until they are prepared to accept help.
We believe that this processing time is essential for clients to make the right decision for their financial future and their peace of mind.
If, like this Waterloo couple, you need to take your time before choosing a debt relief option, be assured that our trustees will guide you through the process.
Get in touch to find out more!
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal