Help for Seniors Struggling with Credit Card Debt

When it comes to debt, the effects of it do not discriminate. Struggling with debt is debilitating no matter what age you are. Living with the reality of not being able to afford necessities, let alone pay off mounds of credit card debt, can make you feel like you are drowning.

More than ever, I am seeing older folks come through my door and guess what. I am relieved. I know these brave souls who grew up with the ages old stigma of yesteryear that bankruptcy was a bad thing and only for the irresponsible. These older folks are realizing that the stigma is a thing of the past and they are proactively doing something about their debt once and for all. I am proud of these people and often discount their bankruptcy fees. But I know there are many more senior citizens and baby boomers suffering in silence with their debts. Often times they are too embarrassed to ask their adult children for help.

Nearly half of all Florida households struggle to make ends meet. It is a struggle none of us want to ever experience, especially those of us who are entering our retirement years. Those years are meant to be for rest and relaxation after decades of hard work, but for many Floridians, the exact opposite is the case.

According to a 2018 report from the Employee Benefit Research Institute, credit card debt has gone up significantly among families headed by someone over the age of 65 for the past decade. It is reported that as of 2016, 42 percent of homes headed by someone between the age of 65 and 74 held some level of credit card debt, while 26 percent of households headed by someone over 75 years old had credit card debt.

High interest credit card debt inhibits seniors’ ability to live a quality life. Even worse, debt leads to retirees not being able to afford necessary expenses, like quality food and healthcare. According to recent data, 40% of all older Americans have credit card debt in excess of $5,000. More than one in five (22%) Americans age 50+ have more than $10,000 in credit card debt.

On average, those with more than $10,000 in credit card debt could not pay off their debt by just emptying their checking accounts. One in 10 American seniors has a checking account balance with less than $1,000 and carries credit card debt.

Why is credit card debt such an issue for seniors? Most senior citizens are living on a fixed income and are not able to pay for unexpected expenses that come up. They find themselves strapped for cash when facing a medical crisis or other unexpected home or vehicle repair.

Additionally, as living expenses go up over time, the fixed income that many seniors are receiving remains flat. The cost of living in the Orlando area can be hard for even those who do not live on a fixed income, let alone someone who has limited financial resources. Many of these reasons can lead a person to resort to using credit to pay for unexpected expenses, even basic living expenses.

Here are some important debt management tips we have for seniors:

  1. Focus on debt first. Seniors who are still working should prioritize eliminating their debt before putting more money into their retirement savings. During this step, they should come in a for a free consultation to discuss if wiping out their debt in a bankruptcy is the best way to solve their financial difficulty. Sometimes it is best to rip off the Band Aid. Most people’s homes and cars are unaffected by bankruptcy. Remember, your 401k and IRA is also totally protected in a bankruptcy.
  2. Downsize your lifestyle. The first step to eliminating your debt is to analyze your expenses. Drastic measures can be taken to help ease the burden, including downsizing your home.
  3. Cut off adult children. Seniors struggling with debt may need to stop supporting adult children. Wanting to help your children is only natural, but it can be financially draining. According to a Pew Center Research Poll, 61% of all U.S. parents supported an adult child financially in the last 12 months. Nearly one in four (23%) helped their adult children with a recurring financial need.
  4. Work Longer and do not take on new debt. Working longer can benefit you two-fold. First, eliminating debt reduces the need for cash during retirement. Second, working longer allows seniors to accumulate more social security benefits. For example, working until age 67 compared to age 62 makes a meaningful difference in quality of life decades down the road. According to the workers who withdraw starting at age 62 received an average of $1,077 per month. Those who waited until age 67 received 27% more, $1,372 per month, according to the Social Security Administration.
  5. Consider every option. If paying off the debt is not a realistic option, a debt elimination strategy becomes even more important. Retirees should consider every option when facing debt, including filing for bankruptcy. Filing bankruptcy does not mean you lose your home, car, retirement savings, pension, or personal possessions. Florida has some of the most generous bankruptcy exemptions in the country. It does mean that your unsecured debts, including credit card debt, medical bills, utility bills, payday loans, etc. can be completely wiped out.

If you have questions on this topic or are struggling with debt, call our law firm to schedule a free consultation. Having debt makes you stay up at night. It stresses you out. It ruins relationships. I went through it. Boldly, I mustered up the courage to call a bankruptcy attorney and I pressed the restart button in 2008. And even though eleven years has passed since I made that decision to restart my life, I never forgot what it did for me and how it helped me start over.

It even inspired me and my law firm to become the largest filers of bankruptcies in the country and in the top two in Florida- all from our offices in Orlando and Kissimmee. The Benenati Law Firm has eliminated nearly a billion dollars of debt for its bankruptcy clients, making the firm one of the top twenty filers of bankruptcy in the nation.

There are a great many people out there in Central Florida that should be filing bankruptcy that don’t…because they’re scared. Or perhaps they think they are too young or too old to file. Or sometimes…they are just too darn prideful to file. My friend check that pride at the door because you will meet someone that can truly feel what you are going through – not in the abstract – but in concrete reality. I give you my word that my staff and I will try to help you restart your life…competently, professionally, attentively, and compassionately.

Remember, we are local in your hometown. We make our hours convenient for our clients and offer free consultations on Saturdays (9:00 a.m. – 3:00 p.m.) along with our normal business hours throughout the week. Go to https://www.407bankrupt.com/ or call 407-777-7777 to set up a free private consultation and learn more information. Because Life Has a Restart Button.

We remain OPEN, fully operational, and able to serve you remotely from the comfort of your home.

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