As the debt levels for Canadians continue to rise, we are seeing that seniors are not immune to this trend.
More and more seniors are taking on debt. For many seniors, their debt has become unmanageable, to the extend that they need to file a Consumer Proposal or Bankruptcy.
You do not inherit your parents’ debt
I’m often asked by people whether they are responsible for their parents’ debts. The answer is no. You do NOT inherit your parents’ or other family members’ debts. The assets of the deceased person’s estate must be first used to pay off their debts. You are not directly responsible for your parents’ debts, but it can affect your inheritance.
Helping seniors to deal with debt
Carrying too much debt can be very stressful, especially for seniors who are on a fixed income. There are things that you can do to help your parents or family members deal with their debts.
Although it can be difficult, have an open and frank discussion with your parents about their financial situation. Talk to them about their debts and how they are managing things. You need to be sensitive to their situation and feelings. If you notice that your parents are getting calls from collection agencies, if they seemed stressed about money, or if you see credit card statements and bills piling up, then it is very important that you talk to them about their financial situation.
Find an option to become a debt free
The sooner your parents’ debts are dealt with, the more options that are available. You can help them develop a plan to deal with their debt. Focus on paying off credit cards with the highest interest rates first. Help them develop a budget to manage their finances without going into further debt.
After discussing their financial situation with your parents, and everyone agrees that the debts are too high to deal with, bring them to speak to a Trustee in Bankruptcy. A firm like A. Farber & Partners will provide a no-obligation, no cost review of your parents’ financial situation, and help develop a plan to eliminate their debts and protect their assets.
Articles related to debt among seniors:
- Seniors in Canada have the highest insolvency and bankruptcy rates
- Seniors in Canada facing debt problems – non-statistical reasons