Retirement is supposed to be a joyous time when we can relax and enjoy the life we’ve built for ourselves, our children and grandchildren. Unfortunately, many of us will find that impossible, since we will be saddled with debt. If you have reached retirement age, are a recent retiree or have been retired for years and are struggling to pay down your debt, there are bankruptcy services especially for you. Here’s what you need to know:
Living On A Fixed Income
When you retire, you will be living on a fixed income because you are not receiving a steady pay cheque from working. Many seniors enter their retirement with debt – and mounting medical bills, rising utility costs and property taxes can all contribute to even more money owed. Plus, inflation on items such as food and other essentials can also turn your moderate debt into a large one. Your fixed income may not provide enough financial cushion for you to make ends meet. As a result, you may find yourself ready to declare bankruptcy just to get back on your feet financially.
Your Pension And Canada Revenue Agency
Bankruptcy is filed by those who need to eliminate their debts because they are unable to repay them. Creditors (those you owe money to) can garnish your wages when you cannot pay your debts. However, as a retiree, you do not have wages, only your pension. If you only have government pension cannot be garnished by most creditors. The only exception is if you owe money to the Canada Revenue Agency (CRA) and government agencies, because they can garnish your pensions to recoup those funds.
Credit Rating, RRSPs And Equity
Your credit rating will suffer if you file for bankruptcy. But, as a retiree, you may not be planning on taking on any loans or mortgages that would require a solid credit rating. Also, if you are already in debt you credit is already being affected and will only get worse with your inability to make payments The main thing you need to concern yourself about when declaring bankruptcy when you are retired is discussing any assets and all of the other options available. There are many exemptions and options within a bankruptcy to deal with assets. Pensions are exempt from seizure in a bankruptcy.
The best thing to do when it comes to managing your finances after retirement would be to inquire about bankruptcy or proposal services for seniors. Bankruptcy services are available to all retirees no matter what your age. Please contact us for more information and we can help you determine the right course of action for your financial situation.