Seniors' credit card debt accounts for 43% of older households, according to a survey from The Senior Citizens League. Can the elderly stop paying credit card debt? In this post, we will review what you need to know about elderly credit card debt, including steps in debt protection for seniors and other pieces of information to help your elderly parents in debt.
Why Seniors Should Not Worry About Old Debts
Some may say people shouldn’t worry about senior citizen credit card debt. However, that’s not entirely true. Most seniors gain their income through Social Security, retirement, or other accounts that can’t be garnished. Debt collectors cannot touch these sources of income. However, being judgment free doesn't mean debt collectors will automatically forgive all debts. Too often, loved ones will take advantage of older adults under the assumption that seniors don’t have to worry about debt. Sometimes, older adults will pay for a relative’s car or home repairs or even use their own credit card to pay off a loved one’s debt or loan. That is why it’s important for elderly people to check with their loved ones to ensure they are able to pay off their debts before cosigning a loan or making similar arrangements. After all, the senior will be the one stuck with the debt.
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How Can Senior Citizens Get Out of Debt?
Credit card debt forgiveness for the elderly can be tricky to achieve. However, senior citizen debt relief can be achieved with a few steps. Below are a few methods for senior citizen credit card debt relief.
Balance transfer credit card. This card can consolidate all of your debt into a single account, allowing you to pay one fixed amount each month.
Debt settlement. Sometimes, outside help can be incredibly useful. A debt negotiator can negotiate with creditors on an agreed-upon amount to pay off. The senior can then make the appropriate payment to pay off the debt.
Payday loans. You don’t need a good credit score to get a payday loan. However, it should be noted that these types of loans can be debt traps due to their short 14-day repayment period and high-interest rates. It’s advisable to enroll in a payday loan consolidation program and then pay off cash advance loans.
Reverse mortgage. A reverse mortgage loan allows homeowners to access their home equity without making monthly payments to the lender. This is typically repaid when the borrower sells the home or passes away. To qualify, the borrower must be at least 62 years old, have a considerable amount of equity in the house, and have the ability to afford monthly expenses, such as insurance.
Bankruptcy. Sometimes, it’s best to just eliminate debts altogether through bankruptcy. This can effectively erase credit card debt, medical bills, utility bills, and other types of debt. With Chapter 7 bankruptcy, one can liquidate assets to pay off debt, except for child support, alimony, and similar forms of debt. Meanwhile, through Chapter 13 bankruptcy, you can enter a repayment plan. This period typically lasts 3-5 years.