Downsize Your Debt

By Donna Mihalcheon

Debt management advice for retirees, seniors and boomers.

Canadians are carrying record debt. Statistics show debt among the senior population (those aged 65 plus) jumped 40 percent between 2012 and 2015.  The highest insolvency and bankruptcy rate increases in the country are also among our senior population.

Seniors are not the only aging population seeing increased debt loads.  Bankruptcy and insolvency rates among Canada’s baby boomer population are also on the rise.  Canadian baby boomers are carrying more debt into retirement or delaying retirement due to debt.

There are many contributing factors to this increased debt. Among them:

  • Investments suffering substantial losses during market downturns
  • Pensions frozen or even reduced due to pension-fund losses
  • Savings once thought to support seniors through retirement earning record-low interest
  • Seniors living on fixed incomes with no capacity to earn more money
  • Supporting adult children
  • Medical and healthcare / long-term care costs
  • Unexpected health concerns, decreased mental fitness
  • Loss of a spouse or loved one
  • Family members taking advantage of trusting elders
  • Telemarketing scams targeting seniors

For boomers, often referred to as the sandwich generation, increased debt can also be the result of caring both for aging parents and adult children.

Retiring with debt can be stressful. If you or your parents are approaching retirement, or are already retired and feeling stressed about your financial situation, it is reassuring to know you can get help. 

Seek the assistance of a licensed professional experienced in helping seniors and retirees deal with their debt.  They will work with you to explore all of your options for dealing with debt after retirement, such as filing a consumer proposal that would consolidate your debt, stop the interest charges from accumulating, put a halt to the pesky collection agency calls and allow you to make one manageable payment while protecting your pensions and RRSPs*.

Tips to help aging parents avoid debt problems and financial abuse

No one likes to see their aging parents lose their physical and mental independence and it can be hard to talk to them about needing help. It is important to pay attention to them and monitor their activity.

Here are some tips to help identify when there might be financial concerns, as well as suggestions for helping prevent a financial problem from developing:

  • Be observant and recognize subtle changes; if you notice a problem in one area (e.g., mobility, memory loss), chances are there might be problems in another one
  • To help prevent your parents from being taken advantage of financially, know who they see and talk to—such as friends, acquaintances, caregivers and other individuals in positions of trust
  • Suggest they add themselves to the Do Not Call List (DNCL) to prevent calls from telemarketers
  • Offer to assist with taking care of home repairs, setting up cable and phone services, or major purchases to help protect them against scams
  • Watch to see if mail is regularly opened or if it piles up
  • Take note of websites they may be frequenting, such as online bingo or gambling sites
  • Watch for activity inconsistent with their ability, such as ATM use by a physically impaired person
  • Watch for increased activity on credit cards or withdrawals made from savings accounts or RRSPs in spite of penalties
  • Watch for new authorized signers on accounts or changes to account beneficiaries, changes in property title, or a refinanced mortgage
  • Watch for any changes in Power of Attorney, wills, or trusts
  • Obtain credit bureau disclosure reports and watch for identity theft or transactions they may have forgotten about or are hiding
  • Look at loyalty cards for casinos and other possible avenues for spending beyond their means

Make sure caregivers are hired from reputable agencies and that references are checked.

Donna Mihalcheon is a senior vice president and trustee in bankruptcy with BDO Canada Limited. Donna’s area of expertise is in consumer and commercial insolvency and she leads the Okanagan Thompson practice.  Donna’s community activities include serving as a director on the BC Games Society board. You can reach Donna by email at or by phone at 250-979-4357 or visit,,, or

*Reprint from our Seniors 2015 issue

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