Retirement / Fixed Income – Case Study

Case Study –  Heading into Retirement with Debt on Fixed Income


Regardless of what age you’re hoping to retire, many Canadians are entering their golden years with higher levels of debt. The percentage of senior families still carrying debt jumped from 27% in 1999 to 42% in 2016. As you move to a fixed income, it gets even harder to get ahead. This case study will examine a couple who retired with $34,000 of consumer debt but were able to file a consumer proposal to bring it down to $10,200 without sacrificing their assets.

Retirement / Fixed Income - Case Study 1


When the couple retired in 2010, they had a relatively small amount of consumer debt on their individual credit cards. Together it totalled approximately $10,000. However, the couple were surprised by an unexpected home repair bill shortly after leaving the workforce. They ended up getting a line of credit for the repairs. Unfortunately, the repairs were higher than originally estimated and so they ended up with a balance of $24,000 on their line of credit. When they were still working, they would often work extra hours to pay for unplanned expenses like this. Now on a fixed income, it became hard to make payments towards the line of credit as well as their two credit cards. At the time they reached out to 4 Pillars, they were considering having to return to work. Obviously not ideal!


Debt can be a symptom of any number of problems and life circumstances. However, it is important to understand that YOU ARE NOT YOUR DEBT.

At 4 Pillars Halifax, we'd love to discuss how we can help you become debt free.

Our Plan

When the couple came to our office, one of their main priorities was being able to keep their home. They had some equity in the home, but not enough to qualify for refinancing to cover the debt.  The couple thought their only option was bankruptcy. However, if they were to file bankruptcy they would end up having to “buy-back” this equity, making their monthly payments far more than they could afford. Instead we discussed the option of them filing a consumer proposal – this would protect their assets while still allowing them to tackle their debt. It took several weeks of collecting and reviewing paperwork, working with a Trustee to file and administer the proposal, and awaiting creditor votes, but we were able to structure a proposal that reduced their debt and brought their monthly payments down to a single payment of $170/month. They had been paying over $300 just in minimum payments before filing! Now instead of continuing to grow the debt with interest, they’re entire payment goes towards the principal.


By avoiding bankruptcy, the couple was able to keep their home and other assets. Instead of endlessly making minimum payments, they were able to pay off their debt in less than 5 years. The extra $130/month they saved in monthly payments was put into an emergency fund so they could be prepared for any other unexpected expenses. Once their proposal is paid off, the couple plans to use the extra cash flow to pay off their mortgage faster, getting them closer to being truly debt-free in their retirement. Additionally, the couple was able to purchase adequate life insurance to ensure that none of their children would be left with the financial burden often experienced when someone passes.


The last thing you want to worry about in retirement is paying off debt. Doing so on a fixed income can become quite difficult and leaves little room for unplanned expenses. No matter what age you plan to retire, it’s critical to eliminate as much debt as possible before that day comes. If you’re looking for a way to deal with debt, reach out to 4 Pillars Halifax. We’ll come up with a plan to get you out of debt that accounts for your goals and the things that are important to you.

Our process first starts with a free consultation to understand your options. To schedule one, please fill out the form below and someone will be in touch as soon as possible.

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Debt Relief SpecialistThis article was written by David Moffatt. A Senior Debt Relief Specialist with 4 Pillars Halifax. 4 Pillars has assisted in creating plans that have helped save Canadians over $1 Billion dollars of consumer and tax debt since 2002. We believe that no consumer should have to struggle with the stress of overwhelming debt. Our debt restructuring plans can help you cut your debt by up to 80% with less than 3% of our clients ever getting into deep financial difficulties again. If you are struggling with debt please reach out. It hurts to continue to suffer financially.

4 Pillars Halifax services Halifax, Dartmouth, Bedford, Sackville and the entirety of HRM.