Debt Relief Options for Retired People
Baby Boomers and Retirement
According to the AARP, baby boomers have generally arrived at this age without adequate preparation or savings, thanks largely in part to the recession that occurred a couple of years back. With the way the recession wiped out retirement savings nationally, this is historically among one of the worst times that a person can retire. Over the last year about half of all individuals born within the baby boomer period have seen a notable decline in their finances. Many are unexpectedly confronted with paying their sizable debts with a tiny income, receiving much less than they require with their retirement accounts.
Because of this, many retirees have started, un-strategically looking for help from credit lines.
Handling Debt as a Retiree on a Fixed Income
Handling debt is already a difficult enough task, so it goes without saying that trying to manage debt after retirement can be much more difficult.
After all, when you’re working, you can always work longer, get a raise or a promotion, or find additional streams of revenue. It might even make sense to further your credit lines as a last resort if you have additional sources to make money. As a retiree facing high debt, a fixed income can cause a huge problem requiring serious or debilitating debt considerations and relief solutions. This is why retiree’s should consider seeking professional help from a debt settlement, credit counseling and debt consolidation company.
Senior Citizens and Bankruptcy
As there are fewer and fewer opportunities for a retiree to obtain additional income to relieve their debt, more and more seniors find themselves falling deeper into debt, using their credit cards more frequently to cover expenses they can no longer afford. Of course, that only works in the short term, serving only to worsen the burden of debt and creating a bigger problem later on in life.
Because of this, more retirees are seeking debt consolidation and settlement. BankRate has reported that bankruptcies are on the rise, with senior citizens turning out to be the fastest growing population to file.
Reverse Mortgages as an Option for Debt Relief
One way that a retiree in deep debt can avoid bankruptcy could be a reverse mortgage. This is when you take out a loan against your home, and you can continue to live in it for the remainder of your days. After death, the house is sold, and the loan is paid off with the proceeds. Your heirs may receive whatever is left after the interest and fees, but the banks suffer if there is no money leftover.
This can seem like a good option, but the interest rates and the fees are considerably high for the convenience the loan provides. Before looking at this form of debt relief, consider the debt that you have and weigh your option between that and a standard home equity line of credit, which often come with cheaper rates and fewer fees.
Debt Programs and Additional Options
Other programs include debt management programs or debt consolidation loans that can also help with the burden of debt, bringing the amount you pay each month to something more easily managed with the fixed income you earn. Alternatively, there are assistance programs offered by the government, but retirees will need to be creative if this doesn’t work out. For example, if you own a large home, consider renting out a room or even downsizing.
More and more senior citizens who handled all their finances right still face unexpected debt today, and they can find it difficult to ask for help even though there’s nothing to be ashamed of. Keeping silent solves nothing, and there are debt relief programs for a reason.
Get help before you become even more overwhelmed in debt.