Consumer debt and bankruptices don't discriminate: licensed insolvency trustee
In 2013, Ti Zhang received news of their mother’s sudden passing.
At the time, they were in their mid-20s and living in Paris with their one-year-old child and then-partner, while their mother was living in Vancouver.
“It came as a really big surprise. It was very sudden,” the 35-year-old recalled.
“I think I woke up one morning and I got the news and the rest is kind of a blur. I flew back and it was one of the hardest flights I've ever taken."
The grief that Zhang dealt with was overwhelming, they said.
And it was compounded by the financial decisions they were forced to make — from funeral costs and handling a monetary gift that their grandmother left behind for their mother, to paying rent in both Vancouver and Paris while deciding their next steps.
“(It) was really confusing to navigate as a young adult and also juggling a young baby and without much of a network in Vancouver,” said Zhang.
Decision-making of any sort can be difficult to do in a period of grief, let alone decisions related to money, experts say. That’s why they recommend taking time before making any big financial decisions while grieving.
“Grief can be overwhelming; you're tired, you're not sleeping well, you're not eating well. None of us make good decisions in that state,” said Sara McCullough, a certified financial planner at WD Development in Kitchener, Ont.
“One of the things I find really gets overlooked is, it’s OK to take time to make decisions.”
Once you’ve given yourself the time to process the immediate shock associated with grief, McCullough recommends finding out how long you’ll be able to manage your basic expenses. She calls this a “hard deadline.”
If your money is going to run out sooner than later, McCullough said you should figure out how you’re going to make ends meet. Taking bereavement leave could be an option available to you.
On the other hand, if you have a financial cushion that could last you at least a few months, she suggests reassessing your priorities since they tend to change when you’re grieving the loss of a loved one, a job or a relationship. This step, she said, can also take time.
If you’ve received an inheritance, it can be especially difficult managing it if you don’t have experience handling large sums of money. In that case, McCullough encourages people to thoroughly think through their options or to speak to advice-only financial planners.
Beware of anyone who may try to sell you products or services when you’re in a vulnerable state, she added.
“Slow down and say, ‘Whatever is being recommended, how is that good for me?’” said McCullough.
Sandra Fry, a credit counsellor with the non-profit Credit Counselling Society, agreed that you shouldn’t jump into any financial decisions when you’re experiencing grief.
“Make sure that you give yourself time and space and the grace to recover,” she said.
If you find yourself unable to handle urgent tasks like paying rent or mortgage payments, don’t be afraid to lean on someone you trust, said Fry.
In addition to using a non-profit credit counselling service for free financial advice, Fry recommends turning to therapists and support groups like GriefShare for mental health support.
For funeral planning, Fry said it’s beneficial to have someone there with you who isn’t as affected by the tragedy to be your “sounding board” and ensure that you aren’t making any rash and costly decisions.
“As soon as it becomes overwhelming, don't be afraid to reach out for help,” she said.
Fry suggests watching out for scams, too. For example, she said collection agencies may try to collect on debt that belonged to your late loved one from you, but what most people don’t realize is that debt isn’t always inherited.
“The only debts that survive are joint debts, or debts that are secured to an asset like a car or house,” she said.
After reflecting on their experience, Zhang’s advice for others is to have a plan in place for you and your loved ones in case one of you dies, which could include a will, a list of important passwords and arrangements for your belongings, and to become more financially literate so you can make sound financial decisions even in times of grief.
“Having this kind of knowledge prevents you from making really naive decisions in times of crisis,” they said.
“So start studying right now, and when these things happen, you'll feel a lot more confident and prepared and make more informed choices.”
This report by The Canadian Press was first published April 25, 2023.