Bankruptcy and Seniors

	Bankruptcy and Seniors - Money Problems Radio Show (Opens in a new window. Optimized for Windows Media Player 6.4 and later versions.)
Originally aired on January 7, 2006.

Show Topic:

Long termed "The Golden Years", it's a widely held opinion that by the time most people reach retirement years, the struggles of dealing with debts and financial obligations are behind most couples. That, however, is not always the case; household debt amongst seniors grew 164% from 1992-2000 in the U.S. Although seniors file a relatively small portion of the overall insolvency proceedings, they are the fastest growing segment. With the baby boom generation ready to explode into their retirement years the problem of seniors dealing with debt is a real one. Today on the show we will discuss this growing problem.

Guests:

Doug Hoyes joined us from the firm of Hoyes Michalos, & Associates, Trustees in Bankruptcy. Doug and his partner Ted Michalos started their company in 1999 and in those 7 years have helped thousands of clients take control of their circumstances, prepare a plan and get a badly needed "fresh start". Doug is a chartered accountant and a professional in personal bankruptcy.

Show Summary:

Doug reported that 6% of the clients they see filing consumer proposals or personal bankruptcy are 60 plus years of age as detailed in their study, "The Face of Insolvency". In fact recently clients in their 70’s and 80’s have become a common occurrence in the Hoyes offices. Credit is available to people of all ages so the problems are only escalating. Doug pointed out that older people should begin to do some money planning taking into consideration increasing healthcare costs. Having some savings or looking into different health plans or insurance plans may assist in covering medical needs, as we get older, alleviating stress on our finances. Older clients have traditionally been leery of credit cards, however that doesn’t mean that mature people are not getting into debt at an increasing rate. Quite often, being a supportive parent or grandparent and trying to assist younger family members by "writing a cheque" is landing older people in jeopardy. Doug also pointed out that the "sandwich generation" is finding itself in this circumstance - having to care for parents and children all at the same time. Many times elderly women find themselves in a real crisis as the husband has usually handled the money and now has pre-deceased his wife leaving some serious problems behind . To combat this circumstance Doug advised involving both spouses in "how the money works". The best way to meet retirement with a leg up on financial worries is to be debt-free when you stop working: carrying forward mortgage or car payments can be problematic as you are not earning wages any longer and you need to be free of as many financial obligations as possible.

Question of the Week:

Q. My father died last year leaving my mother with a bunch of debt that she has little or no idea of how to deal with. She has no income besides her pension. We are thinking of selling her home but that would mean retirement living or moving in with us. A friend suggested we file for bankruptcy. I am wondering if there are other options?

A. There are a variety of options. You could do nothing, as there are no wages, there is no income to help pay the debts. Look at the value of the home; a second mortgage may be a possibility to pay off the debts. A bankruptcy will result in losing the home, so it is the last resort. Doug suggested that a lump sum proposal to creditors might be the most advantageous route. It's worth it, he advised, to sit down and talk to a licensed trustee as these issues have an emotional and personal cost as well as a financial one.

Don't let your Money Problems overwhelm you; contact a bankruptcy expert today for more information about your alternatives.