How debt relief works: A retirement case study

How debt relief works: A retirement case study

It was recently Seniors’ Week in Alberta.

One thing that most of the individuals we help have in common is that they never thought an insolvency filing would be something they’d ever need or consider. This is particularly true of seniors who have gone their whole lives without having to resort to an insolvency filing despite facing financial struggles along the way, as most of us do.

Once a person retires, their options for improving their financial situation are reduced. Often, returning to work is not an option due to health problems, age discrimination, or a need to care for an ailing spouse. But seniors are still very much exposed to financial risks like inflation, scams, stock market crashes and unexpected expenses, and some end up in debt as a result.


When their debt initially becomes overwhelming, many people know nothing about debt relief, so they struggle with their debt for months or even years before seeing a Licensed Insolvency Trustee (LIT). One of the hardest things about being an LIT is hearing such stories and knowing that people could have gotten help earlier. Therefore, we’re continuing our series of blog posts highlighting some of the people we’ve helped and their situations* in case the reader sees themself, a client, or someone they care about in these stories, in the hope that this may spur them to reach out for help.

*Names and othis details have been changed to protect the confidentiality of the individuals whose stories we tell


Doug reached out to us after his son recommended he talk to a Licensed Insolvency Trustee. Without this nudge, Doug likely would've taken longer to accept that, after over 80 years of keeping up with his bills, he was in this position. But when faced with the reality of the situation, he quickly admitted that he needed help and gratefully accepted it.

Doug had had many ups and downs over his life, some which strained his finances, but he was frugal, responsible, and a hard worker, so he always managed to find a way to pay off any debt he accumulated during hard times. Eventually, he became unable to work full time due to his age, but he enjoyed working and meeting new people so he worked part time to supplement his government retirement income. However, the older he got the harder he found the game. Those who were hiring tended to assume he was too old to be capable of anything with a physical component, or they assumed that he was on the verge of fully retiring. So they either passed him over or put him first in line for cuts. He accumulated some debt while looking for work between jobs, and eventually ended up in over his head.

Doug’s debt was less than $20,000, a level which he would have easily paid off when he was working full time. But now he had to face the truth that he likely would not be able to pay it, as the sorts of jobs he might eventually be successful finding would not pay enough to chip away at the debt, especially as interest continued to accrue. Meanwhile, his stress in trying to find work while keeping up with minimum payments was impacting his physical health. His son wanted to help, but Doug didn’t want to put his son’s finances in jeopardy. On the other hand, he couldn't stomach the idea of simply walking away from the debt, leaving creditors no option other than to send collection agencies after him.

We offered a proposal to Doug’s creditors wherein his son would provide a lump sum payment of a portion of the debt and the rest would be forgiven. Since the amount offered was more than the creditors could hope to receive if Doug filed a bankruptcy, they quickly accepted the offer. The debt has now been taken care of, and Doug is grateful to his son for lessening his stress in his final years, which his son was glad to be able to provide.

Don't delay getting help

Too many people delay coming to see a Licensed Insolvency Trustee, spending months, years or even decades struggling with their debt, because they don’t think people like them make an insolvency filing. The truth is, most people who take this step are regular people who’ve gone through a difficult time and, as much as they want to pay their debt, they need a re-set.

If you're struggling with debt and want to explore your options, we can help. Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee, serving the southern Alberta region. We regularly help individuals navigate their options for dealing with overwhelming debt. If you'd like a free, no-commitment consultation to review your options, contact us.

Disclaimer: This publication provides general information and should be seen as broad guidance only. The information contained herein cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon this information without obtaining specific professional advice relating to your particular circumstances. Charla Smith & Company Ltd. does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

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Frequently Asked Questions

Licensed Insolvency Trustees (or LITs) are the only people who can provide bankruptcy or Consumer Proposals as an option for dealing with your debt. They are uniquely qualified to provide these services and give you advice about your debt. For more information, see our blog post: What is a Licensed Insolvency Trustee?

Not at all. Bankruptcy is one of the services we provide but it is not the best solution for everybody. In fact, more often than not we recommend a solution other than bankruptcy. A Licensed Insolvency Trustee is simply the best resource for reviewing your options, as we are highly trained, regulated by the government and our professional association, and well-versed in a variety of options. Contact us if you'd like to start a conversation about your options.

There are several factors which must be considered to determine which options are feasible for you and to select the best one, including:

  • What assets do you own?
  • Who do you owe money to and how much?
  • What sort of income are you bringing in and how predictable is it?
  • What is your family situation?
  • Your personal goals and priorities

Check out our Consumer Proposal and Bankruptcy pages for information about each of these options and their pros and cons. For more indepth information about these and other options, we've provided a plethora of information on our blog

For a fulsome review of your situation and advice about which option is best for your specific circumstances, contact a Licensed Insolvency Trustee for a free no-committment assessment.

A Consumer Proposal is a legal process available to insolvent Canadians with no more than $250,000 in debt (not including a mortgage on a principal residence) to negotiate an extension of time and/or a reduction of debt with all your creditors at once.

A Licensed Insolvency Trustee is required to file a Consumer Proposal. We'll work with you to determine whether a proposal is the best option, and to develop a proposal that is both achievable for you and beneficial for your creditors. For more details on the features and benefits of a Consumer Proposal, visit this page or our Consumer Proposal blog or contact us.

Debt consolidation may be a good option for you, and if so, we would advise you of this during the Financial Assessment stage. However, debt consolidation doesn’t have many of the important features of a Consumer Proposal, which include: providing a legal 'stay of proceedings' immediately stopping actions your creditors might be taking, and dealing with all of your unsecured debt. Debt consolidation also does not allow you to reduce the amount you owe, which may be necessary if your debt level is unmanageable.

For more information on this topic, check out our blog post entitled: Consolidation Loans: the Good the Bad and the Ugly or contact us.

The process for making a Consumer Proposal is standardized, in accordance with rules and procedures set out in the Bankruptcy and Insolvency Act of Canada. This means it is transparent and predictable, which is good for you and for your creditors (which makes them more likely to accept your proposal). Essentially, you work with your Licensed Insolvency Trustee to prepare documents for your creditors, explaining your situation and your proposal. Your creditors then vote on the proposal and, assuming they vote yes, you follow through on the proposal, including making the payments it sets out.

Contact us if you'd like to find out more about potentially making a Consumer Proposal.


With our experience and our caring approach, we will help you find the best option for debt relief based on your unique situation - from advice on talking to your creditors to a consumer proposal or bankruptcy, and everything in between. We are here to lift the burden caused by overwhelming debt. 

Contact us today at 1-403-899-3890‌ for a FREE, no-commitment meeting, and let us guide you to regaining your financial footing.

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