Senior Citizens and Debt

Senior Citizens and Debt

I wish that it wasn’t the case, but I am seeing Senior Citizens in my office more often every month.  As noted in the recent 680News article entitled “Seniors increasingly struggling with debt, bankruptcy: report“, it’s becoming a trend.
When managing a fixed income, budgeting becomes especially important.    It’s all too easy for Seniors to supplement their monthly income with credit without even realizing it.  Income usually falls after the passing of a spouse, while fixed costs remain the same.  This often results in the use of credit.  Another common reason for Senior’s use credit is to assist loved ones in need.
When you use credit, you borrow against your future earnings.  This concept works fine for big ticket items like houses and cars where you will apply your future income against those purchases, and it’s unrealistic to save up the entire cost up front.
The problem is that seniors on fixed incomes don’t typically have the means to afford debt payments on a monthly basis.  So when seniors borrow, and can’t afford to service that debt, it often results in further use of credit to make the payments leading to their debt becoming larger and larger while the interest meter turns the whole time.
The Seniors that I see are usually at the point where the stress of their debt is taking its toll on them, or they’re being harassed by debt collection companies.
Before considering bankruptcy, it’s important for Seniors to understand the concept of being “judgment proof”.  Bankruptcy may not be necessary for judgment proof Seniors.  You are judgment proof if you:
1) Don’t own any non-exempt assets; and
2) Your only source of income is from employment insurance, social assistance, and pension payments, as these forms of income cannot be garnished.
You can’t get blood from a stone, and creditors can’t get money from you if they can’t attack your property or income.  If you are judgment proof, then they only reason to file for bankruptcy and discharge your debt is if your creditors are bothering you or if your debt is causing you stress.

Bankruptcy

Bankruptcy stops interest and collection calls, and can cost as little as 9 monthly payments of $200 or $1,800 in total.  If your debt is bothering you, then it’s definitely worth considering.  Learn more about Bankruptcy on our Bankruptcy page here.

Get In Touch

If you’re a senior citizen dealing with debt, then give us a call.  We offer free consultations in which we take the time to understand your unique personal situation and explain your options to you.  What are you waiting for?  You’ve got nothing to lose except your debt!