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Much has been written recently about “the sandwich generation“: those of us at a time in our lives where we are caring for our children AND for aging parents. While invisible to the general population, the financial pressures and debt load of this generation can be staggering. On one side they must grapple with covering the costs of tuition fees, housing, and food costs, as well as textbooks and other expenditures. And at the other end they have one or more of parents with a host of financial, medical, and emotional pressures.

This situation can become even more financially trying if a parent must leave their home and be placed in either an assisted-living or senior care facility (what society used to call an “old age home”).

That’s why I was moved by an email I received recently, from someone inquiring about how best to tackle the financial pressures of this exact situation.

The writer mentioned that her mother was currently residing in a nursing home, due to her inability to care for herself.  The mother’s Old Age Security and Guaranteed Income Supplement pension money was flowing directly to the senior’s facility. Unfortunately, these payments ended up covering only a portion of the monthly costs. In just a few short years, the shortfall had risen to more than $30,000. This writer could not longer cope with the pressures brought on by that rising debt load, as well as the compounding interest that continued to accrue on the unpaid balance each month.

On top of that debt, the writer had tuition and room-and-board expenses for two children currently attending universities in Ontario.

Between the debts being generation by her mother’s situation, and the debt load generated by her childrens’ education costs, this single mother’s debt load was staggering, and not likely to be reduced on its own. So, what to do? She made it quite clear that she was terrified of filing for protection from her debts, for fear that the nursing home would toss her mother out onto the street. And she could not take a leave of absence from her job to care for her aging parent either.

My answer to this member of the Sandwich Generation

“Thank you for your questions regarding your mother and her residence in a nursing home, and the additional debtload you are grappling with for your two children. I completely understand your concerns about a potential bankruptcy filing in Ontario and what that might mean for your mother’s residence in the nursing home.

To set your mind at ease a bit, following the amendments made to the Bankruptcy & Insolvency Act (the BIA) on September 18th, 2009, a creditor cannot terminate a contract with a debtor if that person files for bankruptcy protection. This ruling primarily applies to such things as household utilities, car financing or leasing, a mortgage on a home, etc. But it can also be for apartment rent or nursing home residence fees.

The question we need to answer is: WHO is the debtor? You or your mother? Did you personally guarantee her debts to the nursing home? If so, you should be able to have that debt discharged in a bankruptcy filing (or, make a reasonable settlement offer to the nursing home through a Consumer Proposal).

If the debt is in your mother’s name AND your name, you would both need to file for protection in order for the debt to be discharged in a Bankruptcy or Consumer Proposal.

I would strongly recommend soliciting some assistance on this issue from an independent authority, such as community-based social worker or social action agency specializing in caregiver and senior citizen issues.

You also need to sit down and crunch some numbers to best determine what might happen in the future. Ridding yourself of the existing debt will provide you with some debt relief now, but new debt accrued at this nursing home will put you (and possibly your mother as well) right back into debt very quickly.

An alternative to continuing with the same situation might be for you (again, with the help of a social services agency or advocate) to search out a more affordable alternative housing arrangement for your mother. The goal here is to stop the generation of further debt that could continue to cripple you and for your mother’s pension money to cover most, if not all, of her monthly expenses.

As for your children’s expenses at university, the Government of Ontario offers a range of post-secondary school funding options, including interest-free loans and grant money. These funds are available for eligible students who are enrolled in an accredited institution (including a university or community college). Known as OSAP (the Ontario Student Assistance Program), it provides funding for tuition, living expenses, school fees and other post-secondary costs. You can find out more at their informative website by visiting: www.osap.gov.on.ca.

Each school break period (usually running from May until the end of August), you may want to encourage your children to help “pitch in” with the household expenses by holding down summer jobs. A young adult could easily earn $2,000-$4,000 per summer working at any of the myriad jobs available to students (from the local movie palace, to such popular attractions as Canada’s Wonderland).

If your children were willing to turn a portion of their summer income over to the household to cover their room and board at home, it would allow you to stretch your budget a lot further, and give you some peace of mind.”

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