Senior citizen Debt in Canada is on the rise, so the question is, what can you do about it? When you are no longer in the work force and no longer have income coming in. How can you get yourself out of debt – especially during a pandemic? Keep reading to understand more about senior citizen debt in Canada and all the options you have to pull yourself out from under it.

Senior Citizen Debt in Canada

The reality is that the majority of seniors on a pension did not save enough during their working years to be able to survive their golden years. The government pension is something everyone was expecting to rely on. Unfortunately, the payments come up short for millions of Canadians each year. There cost of living and the cost of homes is continually increasing. Medications cost a lot, too, and once out of the work force. Many Canadian seniors only have public insurance plans, which don’t cover as much.

Costs continue to increase while income decreases, making it very difficult for seniors to make ends meet. When unexpected medical costs come up, seniors have no choice but to go into debt to be able to afford what they need. The tricky thing about debt in your old age is that it can be inherited by your next of kin. For example, if you own your home, your next of kin cannot accept the inheritance unless they also accept the debt left behind. This means your debt will never really go away – it’ll just be transferred.

Senior citizen debt in Canada is a huge problem, leaving millions of seniors stressed out and scrambling for funds to stay afloat when they should be enjoying this phase of life. Keep reading for our tips on how to go about managing senior citizen debt in Canada.

Signs Your Debt is Unmanageable

Many seniors have had debt all their lives, so what makes this debt different? Well, senior debt is a different ball game. The ability to pay more is usually not an option for seniors on a fixed income. Here are the warning signs that your debt is too much to handle and you need to seek financial aid to figure things out:

• You have many monthly payments and can only afford the minimum on each one
• Sometimes miss payments due to lack of funds
• Carrying balances on your credit cards from month to month
• You are using up so much of your disposable income on debt payments, that you are running low on funds for necessities and in turn are just incurring more debt as you go along.
• You are being refused for personal loans from your bank.
• When You cannot afford medical care you need.
• Rely on credit lines to make essential payments like mortgage or rent payments, utility bills, etc.

Why is There So Much Senior Citizen Debt in Canada?

There are many reasons why Canadian seniors are now grappling with debt after retirement. Many baby boomers are finally retiring, but this generation spent the earlier part of their careers caring for sick parents. The later part sending their children off to access higher education. Though the baby boomers contributed greatly to the economy. They didn’t always have much left over to save up for the future.

Promises of a robust pension plan from the government also led baby boomers to believe they didn’t need to save all that much, anyway. Unfortunately, living on the government pension alone is insufficient for most elderly citizens. In addition, many senior citizens are still paying off education programs for their children. Making sizeable contributions to their grandchildren’s education funds – making their fixed income seem smaller and smaller. This generation is accustomed to helping others, but right now, it’s hurting seniors more than ever before.

Managing Senior Citizen Debt in Canada

Dealing with senior citizen debt in Canada is a stressful situation. More and more seniors in Canada are faced with insurmountable debt Very few options to get themselves out from under it. Here are some ways you can help survive Even beat debt so you can begin enjoying your retirement sooner rather than later.

Invest in Property

Investing in real estate income properties is a great way to maximize your wealth and get yourself an income coming in when you are no longer on a weekly payroll. If you don’t have the funds to put down on a property due to debt, no problem. At BHM Financial, we offer plenty of loan products that can help you access the funds you need to secure your financial future. You can take out a personal loan, even if you have bad credit. Once your rental property begins making money, you can pay off the loan.

You can also choose to borrow against the equity in your home. This is known as a Home Equity Loan. You can leverage the equity you have in your home and use as collateral to get a secured loan. Because it’s secured, it won’t impact your credit rating either. This is a great way of using a loan to help you build wealth and give you financial security during your golden years. Plus, you can leave your investment behind to your next of kin.

If you don’t have the cash flow to put down on an investment property due to your debt, you can consider taking out a loan. Borrowing money to borrow money? Actually, yes. The down payment you’re borrowing will cost less interest than the rate of return on your property. So in the end, you’re borrowing and still making money to pay off your initial debt and save for the future.

Downsize Your Home

With the housing market soaring, it’s definitely a seller’s market. If you are ready to downsize your family home and move into something smaller and more suitable to your new needs, you can potentially get lots of cash into your pockets which can help you pay down your debts. Selling your family home and moving into a smaller one can also minimize your cost of living. Heating, electricity, property taxes, maintenance – all your expenses will decrease with a smaller home, leaving you with more money in your pocket and no more debt hanging over your shoulders.

Do Not Deplete Your RRSPs

If you have debt, you may be tempted to cash out your RRSP accounts and get rid of that debt once and for all. The problem with this is that there are huge fees to be paid if you do that. Taking more out of your RRSP account than you are allotted for the year can result in penalties – which may deplete your finds to nearly nothing. Essentially, this is overpaying taxes on money that should be yours to keep and live off of.

Instead of depleting your RRSP accounts, it is best to take out a loan to cover your debt and slowly pay down the loan. You will be losing less interest on a loan than you will be losing when emptying out your RRSP funds. Plus, your RRSPs are all you have to fall back on. Once the funds are gone, you will have no source of income other than the very limited government pension plan. At least, this is the case for most senior citizens in Canada.

Get Debt Consolidation Advice

Senior citizen debt in Canada is a problem too big to ignore. If you are suffering from debt, you can and should seek out financial advice before your debt problem gets out of control. A BHM Financial expert can help you understand your options, find a successful way for your to pay down your debts, and help you create a wealth management plan that will work for you in the long run.

The Covid-19 pandemic has had disastrous financial effects on millions of Canadians, including seniors. Without a proper strategy for getting rid of debt or enough cash flow to pay for the essentials while you pay your debt, the situation will only get worse as you age. Instead, make the choice to take control of your financial situation again and get back in the driver’s seat. With our expert advice, you’ll be well on your way to financial freedom before you know it.

Senior Citizen Debt in Canada Solutions

As senior citizen debt in Canada increases, more and more consumers are wondering how they can get out of it – especially in this economy. Going back to work during a major recession is not a feasible plan for an elderly individual. Instead, you’ll have to rely on other solutions to eliminate your debt and rebuild your financial plan. Here are a few options you have to help resolve your debt as a senior citizen in Canada:

Consolidate Your Debts

When you are paying off several creditors at once, you are overpaying in interest collectively. If you owe may creditors, you may only be able to make the minimum payments on each account and that strategy won’t get you out of debt any time soon. In fact, it’ll just stick you even deeper into the debt cycle – a rat race that is very tricky to escape.

Instead, it makes much more sense to apply for a consolidation loan. This will allow you to pay off all of your creditors at once. Then you will only have one single payment to make and one interest rate that will likely be much lower than what you were paying on your other accounts. A debt consolidation loan will also allow you to build up better credit. Carrying a balance on your credit card from month to month damages your credit rating, even if you are making your minimum payments. By paying those off, you remove the negative impacts on your credit score. Then. You will only have one payment to make and each time you pay on time, your credit rating improves. The goal is to make your payment plan simple, affordable, and easier for you to finally pay off for good.

Make a Budget

In order to pay off your debt and stay out of debt, you should create a monthly budget – and stick to it. This will help you stay on track to pay off your debts and keep you on the path to financial security. If you have trouble creating a budget that works on your own. You can meet with a BHM Financial advisor who can help you develop a budget that will actually work for you. Making a budget and following it will help you reach your financial goals faster. More importantly, it will keep you from becoming overwhelmed by your debt.

Get Rid of Your Credit Cards

You don’t have to get rid of all your credit cards, but you should definitely reduce the amount of credit you have available to you so you don’t end up in trouble. Changing your lifestyle as a senior who is now living on a fixed income can be hard. It involves breaking some spending habits you may have had when your cash flow was higher. If you currently owe money on several credit cards, take out a personal loan to pay them off and get rid of them before they cause any more damage.

What Happens if Seniors Just Don’t Pay Their Debts?

Many senior citizens think that since they are at the final phase in their lives, debt doesn’t really matter anymore. Here are a few reasons why you shouldn’t ignore your debts:

• If you have assets to leave behind, your family cannot claim them unless they also accept your debt.
• If you owe money to the CRA, they can and will garnish your pension payments to recoup their funds.
• Your credit rating will be ruin and you will not be able to secure credit in the future. You may also be refuse for housing with a poor credit rating.

In short, simply ignoring your debt problem is not the best solution for anyone. The best thing you can do is find a way to pay off your debts. Slowly rebuild your credit score and your savings accounts.

Why Wouldn’t I Just Go to the Bank?

For some, borrowing from the bank is a feasible option. You can borrow the funds you need to consolidate your debts from a traditional banking institution – IF you meet their criteria. Unfortunately, a senior citizen on a fixed income with bad credit is not the ideal candidate for a bank loan. You are very likely to be refuse under these circumstances. At BHM Financial, we never factor your credit score into our decision to loan you money or not. Instead, we focus on your income. How much you can reasonably afford to pay back without completely compromising your lifestyle.

Why Should I Choose BHM Financial?

When it comes to senior citizen debt in Canada, we know how stressful this can be for individuals. Now is not the time in your life to be in debt. Our experts will help you find a loan product that can help you pay off your debts and even help you maximize your future wealth. First, our financial experts will explain all of our loan products to you so you can understand. How it all works and choose the loan product that works for you and your individual needs. Next, our consultant can help develop a repayment plan that you can actually afford so you can make your payments on time.

Once this is arranged, we can then help you create a budget to keep you on the right track. Improve your chances of remaining on track towards financial freedom and peace of mind in your retirement.

What Makes BHM Financial Different from Other Lenders?

There are many lenders out there senior citizens can turn to for help, but BHM Financial is unlike most others. For starters, we don’t work with a third party. That means we don’t need permission from anyone to lend you funds. We evaluate your request and your finances ourselves and we lend you the money directly. You can get access to your money quicker because we can get it in your hands the same business day you file your request.

While other lenders may need to review your file for several weeks and have the third party lenders they work with approve your file, as well, we can complete everything for you quickly. We know that when an unexpected expense comes up, you can’t afford to wait weeks or months for approval. In addition, we don’t have to evaluate you on your credit. In fact, we never do. We base our decision on your income and are not obligate to take your credit score or history into account. We know tough times happen and we’re here to help.

Call us today to see how our BHM Financial consultants can help you manage your debt. Get yourself on track to your financially secure future.

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