Help for Senior Citizens Struggling with Credit Cards

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Today's fragile economy is causing many senior citizens, who should be relaxing after years of employment and enjoying their golden years, to end up in bankruptcy court after spending years struggling with credit card debt. Skyrocketing medical costs, prescription drug costs, the ever-rising food, gas and utility costs—all of these have caused seniors to turn to high interest credit cards simply to survive. Many of the debt management options which are readily available to younger folks, such as taking on a second job to pay down debt, just don't translate for seniors.

Possible Alternatives to Bankruptcy

For the large majority of senior citizens struggling to get by on fixed incomes, bankruptcy may be the only realistic solution left for them. There are, however, a few alternatives to look into prior to deciding on bankruptcy, such as reverse mortgages, tapping into life insurance or even simply walking away from mounting credit card debt. Reverse mortgages convert your home equity into cash, received either on a monthly basis, or in a one-time lump sum payment. As long as the senior continues to live in the home, the money does not need to be paid back, but upon your death the bank—rather than your children—will own your home. Only those who are at least 62 years old and have fully paid off their mortgage are eligible for a reverse mortgage.

Why Bankruptcy May Be the Best Solution

Bankruptcy may, in fact, be the most reasonable solution to excessive credit card debt for several reasons: fixed income is generally protected, bad credit is less of an issue than for younger debtors, and most of the time retirement income is protected. Seniors should always consult a reputable bankruptcy attorney or credit counseling agency to discuss bankruptcy options. A six-month credit counseling program is sometimes required prior to filing for bankruptcy, and during this program it's possible that the debt counselor could recommend a debt management program in lieu of bankruptcy. According to AARP, the rate of personal bankruptcies filed by people over the age of 65 has grown by 125 percent between 1991 and 2007, and for those between the age of 75 and 84, the bankruptcy rate has grown by a staggering 433.3 percent. Even bankruptcy may not solve the underlying problem faced by seniors as they will still be on a fixed income, and will likely still have medical bills and other debts which will continue to accrue, only now they will be left with no credit cards to help them survive.

Speak with a Professional

If you are a senior who is drowning in credit card debt, it is critical to speak with a professional prior to making any financial decision. A knowledgeable bankruptcy attorney may well be able to offer you a solution you hadn't considered, and at the very least will be able to clearly lay out your options.