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.
If you are struggling with debt, facing up to the truth may be the beginning of changing the problem. Here are seven solutions to consider.
Remember, reading about debt relief solutions does not mean you have to do any of them. These are options and offer the potential rewards of reducing financial stress and worry.
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.
Credit counseling is often provided by a non-profit agency. They work with you to reduce monthly payment and reduce interest rates on your outstanding debts. 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 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.
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.
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.
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.
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.
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.
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.
Many bankruptcy lawyers offer free consultations to answer your questions.
If you’re seeking relief from debt, 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 solutions for you, 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.