Debt Relief Solutions That Work For Seniors

If you're struggling with debt, you're not alone. Review nine helpful tips that might aid in relieving the burden and getting you back on solid ground.
Green debt relief road sign

First, the important part. Facing the facts. It may not be easy to digest, but many seniors approaching or during retirement are struggling with debt. If you are experiencing it, you may be using credit cards to manage monthly payments, grocery, and medical bills and more.

Debt is a major issue for seniors for a variety of reasons. First, as people age, they typically have less income coming in and more expenses going out. This can make it difficult to keep up with monthly payments on things like credit cards and mortgages. Additionally, seniors are often on a fixed income, which means that if their debt increases, they may not have the means to pay it off. This can lead to seniors being unable to keep up with their bills, and ultimately falling into debt.

If you are struggling with debt, facing the truth may be the beginning of changing the problem. Here are nine solutions for debt relief for seniors to consider.

Remember, reading about debt relief solutions for seniors does not mean you have to do any of them. These are options and offer the potential rewards of reducing financial stress and worry.

Solution 1: Do Nothing

This really isn’t a solution. But for many people, living with debt is more attractive than speaking about it to family and strangers.

If you feel that you’ll be judged, harassed, or endlessly interrogated by well-meaning friends and family, listen to your intuition. You just may be on to something.

It’s hard to face going through the meat-grinder of a judgmental relative…that’s why doing nothing looks attractive. However, if credit card debt is mounting, and you’re having trouble making ends meet, this is not a long-term solution.

Solution 2: Get Credit Card Counseling

Senior married couple with a female credit counselor

Credit counseling is often provided by a non-profit agency. They work with you to reduce monthly payment,reduce interest rates on your outstanding debts, and may teach you ways on managing your finances during retirement. Once set up, you can make one payment to the counseling agency, and they’ll distribute funds amongst your creditors.

This is a good option if you’re getting stressful collection calls. However, remember, this is not debt relief for seniors in the sense that you’ll pay the full balance owed, plus interest. You will get lower interest rates, a lower monthly payment and make only one payment per month.

Solution 3: Get a Line of Credit

If you have equity in your home or property, this may be an attractive alternative. If not, move on to the next solution.

Getting a line of credit such as an equity line of credit enables you to pay off your debts, lower your high interest rates, and avoid having to slog through dealing with a credit counseling service.

Solution 4: Consider a Reverse Mortgage

A reverse mortgage means you can receive your loan in a lump sum or in monthly installments. Obviously, you need to own a home. To be eligible for a reverse mortgage, you must be 62 or older and own your home outright, or with very little owed.

The reverse mortgage means that the balance is due when you die, move or sell your home. At this time, the balance is paid off and any remaining profits go to your estate.

Solution 5: Get Help from a Family Member

Hispanic grandparents with family in park

If you are close with your family and have children, siblings or relatives who are doing well financially, this may be a viable option. Some people are in this position and if so, your family is likely to be there, no questions asked.

When asking for assistance for a medical crisis, it’s important to remember that financial need is a natural part of life. You’re giving people an opportunity to show compassion, practice kindness, and actively help with the realities of life.

Keep in mind, this is nothing to be ashamed of or embarrassed by. If your family is close-knit, they will most likely be sympathetic to your situation. However, if you are estranged or distant from your family, you also know ‘what’s-what.’ In this case, you may want to select an alternate solution.

Solution 6: Selling Big Stuff

Perhaps you can sell large assets. This may include a boat, classic car, or RV. Removing the stress of financial burdens is well worth selling even a prized possession.

Additionally, you may want to use this momentum to downsize and sell your house. If you have a house, condo, or townhouse to sell, the profits could pay off mounting debt.

Solution 7: Filing for Bankruptcy

Filing for bankruptcy may seem like the last resort…but it can address your debt problems. Once you file, creditors are legally prohibited from contacting you. Also, if you have outstanding lawsuits from creditors, filing usually stops this on the spot. In effect, bankruptcy provides debt forgiveness for seniors, which may be the only viable option.

While debt relief through bankruptcy can have advantages, it is not without pain or down sides. You’ll need to appear in Federal Court for a hearing. Bankruptcy is a matter of public record. This action remains on your credit report for up to 10 years. Having your debt become public knowledge may not seem palatable, but at least you know you can leave your dependents debt-free.

Many bankruptcy lawyers offer free consultations to answer your questions.

Solution 8: Apply for a Debt Consolidation Loan

Senior putting numbers into a calculator next to notepad with calculations

Another option is to consider a debt consolidation loan. This type of loan can help you pay off your debts by combining them into one monthly payment. This can make it easier to keep up with your payments and may help you get out of debt more quickly.

There are a few potential benefits of taking out a debt consolidation loan. One benefit is that it can help you simplify your finances by consolidating your debts into one monthly payment. This can make it easier to keep up with your payments and may help you get out of debt more quickly. Additionally, a debt consolidation loan may help you save money on interest charges. By consolidating your debts into one loan with a lower interest rate, you can save money on the overall cost of your debt.

Solution 9: Work with a Debt Settlement Company

A debt settlement company is a service that helps people negotiate with their creditors to settle their debts for less than the full balance. This is often a good option for people who are unable to make their minimum payments and are facing serious financial hardship. Because a debt settlement company takes care of all the negotiations with your creditors, you don’t have to deal with them. This can be a huge relief if you're feeling overwhelmed by your debts.

Working with a debt settlement company can also help improve your credit score over time. This is because as your debts are paid off, your credit utilization ratio will improve.

Assistance Club Summary

If you’re seeking debt relief for senior citizens, you are not alone. You’ve worked hard and played by the rules. You may not feel like it but remember this: you are not to blame.

You may be facing financial challenges, but you do have options. Often circumstances such as recession, health crises, and unpredictable events occur. Debt is a fact of life. It is not a sign of failure, blame, or lack of hard work.

When thinking about the best debt relief solutions for senior citizens, talk to people you trust. Open your thinking to look at all the options before making a final decision. Relief is possible. You can solve your personal financial crises and challenges.

We hope this Senior Assistance Club article on debt forgiveness for seniors has helped you find the right solution for you. We wish you nothing but the best in your road to resolving your debts!