The impact of “Grandpa’s debt” can even span generations, as many people are not aware of an aging loved one carrying debt until either a crisis, or a move to a retirement home is about to start.  The “sandwich generation” often pays a heavy price, as they are supporting younger dependents as well as aging parents, leaving them feeling ‘sandwiched’ between competing financial demands.

Vancouver Licensed Insolvency Trustee Blair Mantin of Sands & Associates discussed some of these challenges with Global News BC and shared some tips on how to manage debt as a senior citizen.

Watch the clip below, and read on for more information:

If you are struggling to manage your debts in retirement, or are helping an aging relative manage their financial affairs, here are some general tips on how to get your debt under control:

• Get it Down on Paper
  • Figure out how much debt is owed, and to whom
    • Check for unopened mail and review any online statements
    • If accounts have gone to collections, call the lender or collection agency directly to get the details
  • To come up with a solution, it’s essential to know what debts you’re dealing with!

• Make a Debt Plan:
  • Once you know the amounts, sit down and create a plan
    • Decide which debts should be paid off, in priority order (usually the ones with the highest interest each month)
    • Figure out how much is needed to cover debt repayment each month, and how long it will take to be debt-free
    • Draft a clear, realistic budget that will allow you to pay your expenses with the income you have available
  • Don’t be afraid to ask lenders for a reduction on interest – you might be surprised at the result!

Some people consider taking money out of retirement funds to pay off debt.  This may not be the best solution and it can create a tax consequence, or leave you falling short on money during retirement.  RRSPs are federally protected assets, this means you can’t be forced to cash in retirement savings to pay off debt. 

• Stop Using Credit:
  • It will be impossible to pay off debt for good if you’re regularly incurring new debts
  • Consider and identify the reasons for having the built-up debt
    • Has the situation changed enough that using credit isn’t happening anymore?
    • If not, what could be done to improve your money situation?
  • Some problems may have simple solutions – for example, if a tax debt is due to a person working a part time job in addition to pension benefits, it’s straight-forward to have more tax deducted at source.
  • Other problems may be more difficult to solve – such as a debt due to co-signing or assisting another family member.  There may be some awkward (but necessary) discussions about whether this assistance can continue..

Many people feel embarrassment about what has caused their debt.  Don’t let that stop you from moving forward financially! 

• Use Seniors’ Financial Resources:
  • Admitting that there is a problem that we need help with can be a very difficult step to take
  • Know that you are not alone, and that help is out there!
    • If suitable housing or high rent costs are issues, connect to organizations such as BC Housing;
    • If financial challenges are creating depression or anxiety, speak to your doctor, or a support group;
    • If debts are unmanageable, meet with a Licensed Insolvency Trustee.

Book your free confidential debt consultation with a BC debt expert today. 

Sands & Associates are an award-winning firm of Licensed Insolvency Trustees with offices throughout British Columbia.  As a legal authority in debt solutions since 1990, we believe that everyone is entitled to a financial fresh start with a debt-free future.

The post Global News: “What to Do with Seniors’ Debt Problems” appeared first on Sands & Associates.

Sands & Associates, BC’s largest firm of Credit Counsellors and Licensed Insolvency Trustees released results of their fourth annual BC Consumer Debt Study today.  The 2016 BC Consumer Debt Study provides an in-depth look at consumers’ debt levels, the factors causing individuals’ financial difficulties, with some additional insights into recent trends such as lower mainland housing costs, payday loans and senior citizens’ debt levels.

The 2016 BC Consumer Debt study by Sands & Associates is the only BC-specific study to gather and analyze responses from over 1,000 individuals throughout the province to take a closer look at the financial challenges faced and the subsequent strategies adopted by British Columbians.

As financial challenges vary significantly across generations, certain sections of the study are segmented into specific demographics across three different age ranges.  Study participants included debtors aged 30 and under (“Youth Generation”); debtors between the ages of 31 and 54 (“Mid-Life/Sandwich Generation”); and debtors aged 55 and older (“Pre-Retirement and Retirement Generation”).

Click here to read the full report in PDF format.

The 2016 BC Consumer Debt Study highlighted the following trends:

• The largest proportion of survey respondents (32.7%) indicated they were carrying between $25,000 to $49,999 worth of unsecured debt (excluding vehicle loans and mortgages) at the time they sought assistance for their debts.
• Overextension of credit, financial mismanagement or unexpected expenses was the top cause of debt as cited by all three generational demographics.
• 52% of respondents indicated that making only minimum payments on debts was the warning sign that made them realize their debts were becoming a problem.
• Nearly one third (30%) of respondents had used payday loans, with the primary reason for using payday loans being to pay day to day living expenses such as  groceries (71.6%).
• A large proportion of the Youth Generation (53.3%) and Mid-Life/Sandwich Generation (41.4%) borrowed from friends or family members in attempt to try to deal with their debts.
• 3% of the Pre-Retirement and Retirement Generation cashed in RRSPs or other retirement funds in attempt to resolve their financial situation.

Vice-President of Sands & Associates, Blair Mantin, further adds, “We continue to see seniors with high levels of consumer debts.  One of the most concerning aspects of this is how many people needlessly deplete their retirement funds during, or as they approach retirement to try to pay down their debts.  They are completely unaware that there are rules in place to protect RRSP funds – and for good reason.  Once those funds are gone, there’s generally no way to reestablish retirement savings that those people will so desperately need again down the road.”

Mantin strongly suggests that individuals carrying debts that they cannot pay off in the coming 12-18 months evaluate their financial options with a reputable professional at the onset of concerns.  “Over seventy five percent of our survey respondents indicated that they would have taken action sooner if they had been aware of how the processes really work.  Licensed Insolvency Trustees are always available to provide information about people’s options – for free.”

Click here to read the full report in PDF format.

About Sands & Associates:

Celebrating over 30 years providing debt solutions, Sands & Associates is British Columbia’s largest firm of Credit Counsellors, Proposal Administrators and Licensed Insolvency Trustees, focused exclusively on personal and small business insolvency services. Now operating from a network of local offices throughout British Columbia, Sands & Associates uses a non-judgmental, empathetic approach to helping resolve financial difficulties and has been recognized as a multi-year Consumer Choice Award winner.

The post Sands & Associates Releases Fourth Annual BC Consumer Debt Study appeared first on Sands & Associates.