On a day to day basis we see people from all walks of life and all ages come through our office. In the last few years, we have had an increasing number of seniors come through our doors. With many companies doing away with pensions and employee retirement plans, Canadian seniors are not always finding themselves where they had hoped to be when it comes time for retirement.
Unfortunately with Government pension plans like CPP (Canadian Pension Plan) and OAS (Old Age Security), some seniors without private pensions are finding themselves in financial hardship. Sadly Canadian pension plans are rarely enough or just barely enough to survive on a monthly basis. Pair this with outstanding debts accumulated as a result of early retirement, sickness, unemployment, or a loss of a spouse and sadly this can lead to a financial crisis for some seniors.
If you yourself are looking for debt options, or you are looking for a loved one, here are some key facts you need to know about your options when it comes to dealing with debts during retirement:
– If you have pension income from more than one source, or you are working part-time to supplement your income, you are probably not having enough tax deducted. When you file your tax return in the spring, you may discover you owe hundreds or even thousands of dollars of income tax and you can’t make your CRA payment. Canada Revenue Agency can withhold tax credits or even garnish a portion of your CPP or OAS to recover the amount you owe. As Licensed Insolvency Trustees, we can stop the garnishment and help you with this debt through either a consumer proposal where you pay back a portion of the debt, or a bankruptcy.
– Other creditors cannot garnish pension income, whether that be government issued, or private pensions. This means that creditors can call and request a payment, they can even take you to court, but they are not legally allowed to garnish pension income – it is protected income.
– If you own a home, a creditor can register a court judgment as an execution which would have to be paid if you sell your house. They are far more likely to sit and wait for you to sell or refinance than to force the sale of your home.
– Collection agents can be brutal and some will say whatever they need to in order to scare you in to paying them because they are paid on commission. You are not going to be arrested, and a collector cannot come to your door and take your personal belongings to collect a debt. There is a limit to how often they can call you. We can help you understand your rights.
– You are not liable for your spouse’s debt. Debt is not inherited and you don’t marry it. It is difficult enough to deal with the loss of a spouse. Don’t be bullied in to paying someone else’s debts if you are not legally obligated to do so! Having a supplemental credit card on your spouse’s account does not necessarily make you liable for it.
If you are worried about your debt, or debts owed by your spouse, parents or a senior you care about, call us at 310-6398. We will meet with you to explain your rights, all of your options for dealing with the debt, and answer your questions. Don’t spend your retirement in fear – we will help!