Debt can be accumulated at any age. But when you are a senior on a fixed income, it can be more difficult to pay it off. Senior debt assistance services are your one-stop-shop for getting yourself out of debt.
Senior Citizen Debt Assistance Options
Seniors, just like people from other age groups and any income level, can get in over their heads when it comes to debt. Fixed incomes, health care costs, home repairs - these and many other factors contribute to rising debt. If debt is a problem, you may want to consider the following solutions.
Home Equity Loan
In a situation where a senior has equity built up in his or her home and outstanding debts, taking out a home equity loan may be a solution. The loan proceeds are used to pay off the debts, and the single loan payment would currently be lower than the multiple payments being made.
Keep in mind, though, that in taking out this type of loan, you are putting your home up as collateral. If you cannot make payments on the loan, you may lose your home.
Deferral of Property Tax
One method of reducing the overall debt load as a form of senior citizen debt assistance is to defer property tax. Doing this even for one year may allow you to transfer those funds onto other high debts bearing interest.
If you have a stable source of income, you may qualify for a personal loan. Again, making one payment will likely be less expensive than making payments on multiple debts each month. Visit your bank to find out whether this option is right for your personal situation.
Debt Assistance Company
Debt assistance companies offer services to people who have accumulated a significant amount, often thousands of dollars, in unsecured debt. A debt assistance company can offer senior citizen debt assistance in the following ways:
- Counseling on issues surrounding budgeting and debt management
- Establishing a debt management plan
Debt Management Plan
A debt management plan is a process during which you and the credit counselor will determine how much you can afford to pay toward your debts each month. You give that money to the debt assistance company, which allocates the amount between your creditors every month. An advantage to enlisting the help of debt consolidation company is that it may be possible to reduce or eliminate late fees and interest on your debts. Creditors are more willing to negotiate an alternate payment schedule because they know they will be receiving on-time payments.
If you choose to work with a debt assistance company, be prepared, for the process of dealing with your debt can take between three and six years. As the debts continue to be paid down, your credit rating will go up. Beware of companies offering to repair your credit for you. No company can look after this for you. Credit repair is possible, but it takes time and a pattern of on-time payments to accomplish this task.
After you have entered an agreement with a debt assistance company, confirm with your creditors that they are receiving regular payments from the company. You will also want to check your statements to see whether the interest rate has been lowered and/or late fees have been waived.
When it comes to dealing with debt, bankruptcy should be kept as a last resort. It is a way to get free from debt, but that freedom does come with a price. The bankruptcy filing will be examined by both a judge and your creditors.
If you choose this route, it will be a considerable time, approximately 10 years, before you will be able to qualify for any type of new credit. You may be required to sell, borrow against, or dispose of your assets, including retirement benefits. Possible exceptions include your home or vehicle.
In addition, there are court fees associated with declaring bankruptcy. If you choose to retain an attorney to represent you, then he or she will have to be paid as well - when you have little in the way of means to do so.
Senior citizen debt assistance is available. Consider all your options and choose the course of action best for your particular situation.