André, 71 years, has managed to build a retirement relatively comfortable. But the pandemic has pushed all of his projects, and forced him to declare bankruptcy.
The retiree perceives the government annuities from age 65. On a monthly basis, it receives 1490 $ per month, an amount that it can barely meet its essential expenses. Resourceful, fortunately he found a job in a ski resort in the winter. There is work also in the summer, because the center organizes summer activities. This work provides a supplementary income of about $ 1400 net per month, with which he was able improve his standard of living.
Lover of travel, and eager to explore the different regions of Québec, he has also purchased a trailer when he retired. Its existence was taking place peacefully, until last march, the pandemic hits the Quebec and leads to a crisis of unprecedented proportions.
Any switch after the PCU
In fact, the ski center where he was working has had to stop its activities prematurely because of disruption of almost all the commercial activities and the containment of the population. Even if it remains still uncertain, it is possible that the center opens its doors this summer, but nothing is sure yet. However, since public health recommends that people over the age of 70 to stay at home and avoid contacts, André will not be able to return to her job.
It currently affects the Delivery of canadian emergency, which gives him a higher income than usual, but as soon as the month of July, the payments shall cease, and he will find himself in a very precarious situation.
There is also the problem of his debts. “His carriage bought on credit six years ago is payable at the rate of $ 250 per month. It also has a line of credit of $ 5,000 and more than $ 11,000 accumulated on his credit cards, ” commented Pierre Fortin, a licensed trustee in insolvency, chairman Jean Fortin and Associates.
Its creditors agreed to postpone payments until September, but this report would mean $ 200 in additional interest for the line of credit and $ 605 for the credit cards.
André captures the month of August. In fact, with 1490 $ per month (his pension), it is clear that he will not be able to make the payments on its debt or repay the loan of his trailer. Even if the rent is relatively low (650 $), as soon as he will cease to receive the SFP, its debt ratio will rise to 97 %. In other words, well beyond the limit of 40 % tolerated by the financial institutions.
Stressed and seeing the horizon darken, Andre decided to take the lead and went to consult a licensed trustee in insolvency at Jean Fortin.
“In his case, the best solution was to go bankrupt. He will have to hand over his trailer to the creditor. Although the value thereof is less than the balance still owed on the loan – 15 000 $, compared with 26 500 $ –, he will be able to free themselves of this debt, as well as those accumulated on its cards and its line of credit of $ 16,000, ” says Pierre Fortin, who adds that when we see that our situation is worsening, it is necessary to act quickly. “We should not feel guilty or ashamed when something devastating comes to ruin our projects and what we had built. Ask for help as soon as you see that the situation eludes you. It is the gesture the more logical and appropriate to ask in the circumstances, ” he says.
- In order to better assess what you can expect in the next few months, start by calculating your debt ratio during the crisis. There are several tools available online, including this one : https://jeanfortin.com/fr/evaluer-votre-situation/evaluez-votre-situation-financiere. Estimate the income that you should feel at that moment. The result will give you a better idea of the things you should ask.
- Then make your budget based on the income that you will have in the post-crisis period. This scenario is not guaranteed, but at least you will know where you stand. If the result is positive, you will be reassured about your future, otherwise, you will have already cut your expenses.