Between credit card payments and co-signing on now defaulted loans, more and more seniors are finding themselves in dire straits when it comes to their financial future. And with these debts just mounting, many are wondering how to even get some debt relief to get out of it in the first place, and then how to make sure that they are never in the same situation again.
According to a recent CESI Debt Solutions survey, more than half of the seniors surveyed fell into debt after retirement. In addition, between 1991 and 2007 bankruptcy filings for those between the ages of 65 and 74 rose 178 percent.
When looking at the reasons for senior debt, relying on credit cards to supplement a fixed income is often cited as one of the biggest contributors to financial troubles. Fortunately, there are some ways to mange that debt by choosing the right card. For those that want to pay off all of their debt, a balance transfer credit card may be the best option; however seniors should be aware that sometimes they may have to pay a high fee to transfer the debt, which would only further add to the total amount owed to creditors.
The other option in terms of a credit card – especially one where debt will not be able to be paid off right away – is to get one with a low interest.
On top of credit card debt, seniors often also find themselves in tricky situations as they want to help family members, and then find themselves co-signing for a loan that is defaulted on, which makes them responsible for paying off the debt. Because of this it’s very important to carefully analyze the situation and decide if payment plans are viable for whoever the loan is being co-signed for before anything is actually signed.
As it was mentioned earlier, many seniors who had already fallen very deep into debt turned to bankruptcy as a debt relief option to either discharge or repay their debts. For many who are now struggling, bankruptcy may still be the best option. Then, once that debt is taken care of, some of these tips in terms of credit cards and loans may come in handy as a way to avoid getting into the same financial situation again in the future.
Source: San Francisco Chronicle, “6 Credit Mistakes Retirees Make,” Michele Lerner, 28 Feb 2011