by Caryl Newbery-Mitchell, MBA, CIRP, LIT & Mary Plahouras, CFE, LL.M.
November 1, 2017
After a lifetime of hard work, seniors should now be at a stage in their lives where they can slowdown, retire and enjoy their golden years. Unfortunately for many seniors, this is not the case. Insufficient income from government pension plans and savings, combined the high cost of living, health issues, relationship breakdown and often providing financial assistance to adult children are some of the main reasons seniors find themselves in debt in their retirement years. As a result, Licensed Insolvency Trustees (“LIT”) are seeing a greater number of individuals in their retirement years looking to understand the options available to them under the Bankruptcy and Insolvency Act (“BIA”).
The primary purpose of the BIA is to allow an honest but unfortunate debtor to obtain a release from their debts and make a fresh start. Under the BIA, an individual debtor may be able to file an Assignment in Bankruptcy or a Consumer Proposal in order to obtain a release from their debts and start fresh again. But to many seniors, the thought of filing a bankruptcy, often after many years of successfully managing their finances and maintaining a good credit history, is devastating. On the other hand, many seniors are also at a stage in their lives where they will not require the use of credit going forward, such as for obtaining a mortgage or credit cards and are in a good position to use a proceeding under the BIA to get out of debt.
Usually the two most significant factors for seniors when considering filing a bankruptcy or a Consumer Proposal are:
- Assets owned by the debtor; and,
- If there is any excess cash available once all monthly expenses have been paid.
- The OSB keeps a list of LIT’s who participate in the BAP by offering their services at a reduced rate. Contact the Office of the OSB to request a BAP registration form and a list of LIT’s participating in the BAP in your locality.
- Once you receive the BAP registration form, contact two LITs from the list and schedule an initial consultation meeting with each for an assessment and to obtain the LIT’s signature attesting to your inability to pay the LIT’s regular fees.
- Submit the completed BAP registration form to the OSB. The OSB will review the information and if warranted, designate a LIT to administer your bankruptcy estate.