Although the "golden years" are supposed to be a time to relax and enjoy the rewards of having worked and paid off debts, many seniors find themselves facing massive credit card debt problems. Seniors often live on a fixed income and if a working senior becomes ill or disabled he may find himself with serious financial problems. Seniors should be careful of using credit cards and should seek credit counseling to get debt under control if they experience a financial crunch.
Special Needs
Senior citizens have special needs when it comes to credit card debt management. Many seniors live on a fixed income, as they are no longer working and may not be able to work anymore. Thus, solutions to debt problems such as getting a second job or cutting back on credit card use may not be viable options for some seniors. Credit counseling may be a good idea to help seniors determine how they can manage their credit and overcome challenges specific to their situation.
Reverse Mortgage to Pay Off Debt
Seniors who own their own homes may consider getting a reverse mortgage to bring extra income in and pay off creditors. Reverse mortgages give the senior a certain amount of money each month, based on his age and the home's value. The loan does not have to be paid back until the senior dies or moves out of the home and there are no restrictions on how seniors may use loan funds. However, if the senior is forced to move due to illness or life circumstances, the loan will immediately become payable and heirs often must sell the home to pay back the loan after the senior's death.
Credit Counseling
Credit counselors can help seniors figure out the best way to deal with debt and to live within their means. In addition, if a senior is considering filing for bankruptcy, she must see a credit counselor prior to filing her bankruptcy petition. Seniors can check the Justice Department's website for government-approved credit counselors in their area. They should also check with the Better Business Bureau for any complaints against a particular credit counselor.
Bankruptcy
Bankruptcy is a last resort for many people because it negatively impacts credit for seven to 10 years. However, this many not affect seniors as badly as it does younger people, as they may not be looking to take out any new loans or move into a new apartment. Filing for bankruptcy can wipe out credit card debt and ensure that the senior's heirs will receive their inheritance, rather than estate funds all going toward paying back debts. Check with a lawyer before filing for bankruptcy to make sure you can keep your home.
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