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How Can the Elderly Stop Paying Credit Card Debt?
by
JG Wentworth
•
September 16, 2024
•
5 min
Credit card debt can be a significant burden for anyone, but it can be especially challenging for the elderly who may be living on fixed incomes or facing health issues. While there’s no easy way to simply “stop paying” credit card debts without consequences, there are several strategies and options available to help manage, reduce, or potentially eliminate these debts.
Understanding the situation
Before exploring solutions, it’s crucial to understand the full picture:
- Assess total debt: Calculate the total amount owed across all credit cards.
- Review interest rates: Note the interest rates on each card.
- Evaluate income sources: Social Security, pensions, investments, etc.
- Consider assets: Home equity, savings, investments.
- Review expenses: Identify essential and non-essential spending.
Legal considerations
It’s important to note that credit card debt is a legal obligation. Simply stopping payments without taking appropriate actions can lead to:
- Damage to credit scores.
- Potential lawsuits from creditors.
- Wage garnishment (if applicable).
- Seizure of assets (in some cases).
Options for managing credit card debt
However, there are legal ways to address overwhelming debt…
Negotiate with creditors
Contact credit card companies directly and explain the financial hardship you or your loved one is struggling with.
Request:
- Lower interest rates.
- Waived fees.
- Reduced minimum payments.
- Hardship programs.
Debt consolidation
By combining multiple debts into a single new loan with a lower interest rate, you can make repayment more manageable. Options include personal loans or home equity loans (if applicable).
Balance transfer cards
This is a type of credit card that allows you to move existing debt from one or more high-interest credit cards to a new card with a lower interest rate, often offering a 0% introductory APR period to help you pay off the transferred balance more quickly and save on interest charges.
Just be aware of balance transfer fees and have a plan to pay off the balance before the intro period ends.
Bankruptcy
As a last resort, filing for Chapter 7 or Chapter 13 can put an end to debt repayment, but with severe consequences for your credit score for years to come. Be sure to consult with a bankruptcy attorney to understand the implications before committing to this strategy.
Special considerations for the elderly
Here are some of the more common considerations to keep in mind that apply to senior citizens…
- Protected income: Social Security benefits are generally protected from garnishment by credit card companies, and some pension incomes may also be protected.
- Limited assets: If an elderly person has limited assets and income, they may be considered “judgment proof.” This means that even if sued, creditors may not be able to collect.
- Statute of limitations: Debts have a statute of limitations that varies by state. After this period, creditors cannot sue to collect the debt. However, the debt still exists and can impact credit scores.
- Medical debt vs. credit card debt: If medical expenses were charged to credit cards, there may be options for assistance or forgiveness through healthcare providers.
- Power of attorney: If cognitive issues are a concern, a trusted family member with power of attorney may need to manage financial affairs.
- Review insurance and benefits: Check for any life insurance policies with cash value and review Medicare and Medicaid coverage. Explore local senior assistance programs for guidance.
- Be cautious of scams: Be wary of companies promising to erase debt quickly while charging upfront fees for debt relief services. Reputable companies only get paid after the debt has been settled.
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The bottom line
While there’s no simple way for the elderly to “stop paying” credit card debts without consequences, there are many options available to manage, reduce, or potentially eliminate these debts altogether. The best approach depends on individual circumstances, including the amount of debt, available income and assets, and the individual’s overall health situation.
It’s crucial to approach the situation proactively and seek professional advice from credit counselors, financial advisors, or elder law attorneys. By understanding all available options and their implications, elderly individuals can make informed decisions to address their credit card debt while protecting their financial well-being and dignity.
There’s always JG Wentworth…
If you or your loved one has $10,000 or more in unsecured debt, there’s a good chance it will qualify for the JG Wentworth Debt Relief Program.* Some of our program perks include:
- One monthly program payment
- We negotiate on your behalf
- Average debt resolution in as little as 48-60 months
- 24/7 support
- We only get paid when we settle your debt
If you think you or your loved one’s debt qualifies for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side?
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The information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that You consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.
* Program length varies depending on individual situation. Programs are between 24 and 60 months in length. Clients who are able to stay with the program and get all their debt settled realize approximate savings of 51% before our 25% program fee. This is a Debt resolution program provided by JGW Debt Settlement, LLC (“JGW” of “Us”). JGW offers this program in the following states: AL, AK, AZ, AR, CA, CO, FL, ID, IN, IA, KY, LA, MD, MA, MI, MS, MO, MT, NE, NM, NV, NY, NC, OK, PA, SD, TN, TX, UT, VA, DC, and WI. If a consumer residing in CT, GA, HI, IL, KS, ME, NH, NJ, OH, RI, SC and VT contacts Us we may connect them with a law firm that provides debt resolution services in their state. JGW is licensed/registered to provide debt resolution services in states where licensing/registration is required.
Debt resolution program results will vary by individual situation. As such, debt resolution services are not appropriate for everyone. Not all debts are eligible for enrollment. Not all individuals who enroll complete our program for various reasons, including their ability to save sufficient funds. Savings resulting from successful negotiations may result in tax consequences, please consult with a tax professional regarding these consequences. The use of the debt settlement services and the failure to make payments to creditors: (1) Will likely adversely affect your creditworthiness (credit rating/credit score) and make it harder to obtain credit; (2) May result in your being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money you owe due to the accrual of fees and interest by creditors or debt collectors. Failure to pay your monthly bills in a timely manner will result in increased balances and will harm your credit rating. Not all creditors will agree to reduce principal balance, and they may pursue collection, including lawsuits. JGW’s fees are calculated based on a percentage of the debt enrolled in the program. Read and understand the program agreement prior to enrollment.
JG Wentworth does not pay or assume any debts or provide legal, financial, tax advice, or credit repair services. You should consult with independent professionals for such advice or services. Please consult with a bankruptcy attorney for information on bankruptcy.