Helping Family Caused Financial Problems for Windsor Seniors

by Rebecca Martyn on June 10, 2015

helping familyRecently Hoyes, Michalos published their Joe Debtor study where they look at a typical person who files for bankruptcy or consumer proposal with our firm.

What is surprising about the survey is in the increase in seniors who are facing financial difficulty. When comparing the study done in 2009 to today, seniors are the fastest growing age group of people facing financial difficulty.

A Windsor Case Study

It reminds me of when I met Kevin and Susan (not their real names, also known as the kids) about 5 years. They had been living beyond their means for some time. They always wanted to have the newest car and truck and everyone in their family had the latest smartphone (until the next one came out). Since they continually rolled the balance owing on the “old” cars into the new cars they had massive amounts of money still owing. They also had money management issues which caused them to pay out more than they could afford in minimum payments. They came to see me and filed for bankruptcy. Admittedly, their money management problems continued, and we needed to extend their time in bankruptcy in order for them to complete their obligations to the bankruptcy, including their requirement to pay surplus income.

Two years later, Henry and Rita came to see me. Kevin and Susan (not their real names, also known and Mom and Dad) had recommended us. Henry and Rita are Susan’s parents. Their financial difficulties stemmed mainly from helping out Kevin and Susan. The first thing they did around 7 years ago was to lend Kevin and Susan money when they complained their house was too small for their growing family. Unfortunately Kevin and Susan’s money management issues were too great for the house and after a year, the bank took it back. Mom and dad’s money was gone, and shortly after that Kevin and Susan filed bankruptcy with me.

Henry and Rita also helped out the kids with groceries and providing before and after school care (Henry and Rita live in Tecumseh, the kids – Kevin and Susan lived in Amherstburg). The gasoline bill each week was large. Naturally, Kevin and Susan weren’t giving them gas money. Henry and Rita kept make charges on their credit cards helping out the kids until one day they realized they could no longer afford it. After meeting with me they filed a consumer proposal which was just completed.

What could everyone have done differently?

One first thing is education. Had Kevin and Susan talked to their kids about money? If they saw the kids were having problems, they could have offered to to help them find a different way to reach their financial goals. The kids should have also learned not to be constantly reaching out and figuring out a way to make it work with what they had, or seeing a professional for help with their money management issues.

Why didn’t Henry and Rita say no to the constant requests for money? I understand they wanted to help out but giving them money for something neither of them can afford, isn’t helping them. In the end, Henry and Rita received none of the money back they have the kids, and all it has created is family strain.

Its great to help family financially, but you need to make sure it is something you can afford.

About

Rebecca Martyn is a bankruptcy trustee and consumer proposal administrator responsible for the Hoyes, Michalos & Associates office in Windsor, Ontario.

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