Nonprofit credit, student loan counseling agency Take Charge America
breaks down issue, shares advice for seniors in debt
PHOENIX--(BUSINESS WIRE)--More older Americans than ever before are carrying debt into retirement
– and often their debt grows from there. From medical and credit card
debt to home mortgages and even student loans, many seniors are living
on a fixed income and find it impossible to juggle daily expenses and
loans.
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“Seniors in debt often are forced to make impossible decisions about how
to spend their limited funds,” said Michael Sullivan, a personal finance
consultant with Take Charge America, a national
nonprofit credit counseling and debt management counseling agency.
“For many, this means forgoing needed home repairs, missing doctor’s
appointments, cutting pills or skipping meals in order to afford a loan
payment.”
According to the Federal Reserve Bank of New York, debt among seniors
has grown steadily in recent years. The percentage of total household
debt held by people age 60 and older has nearly doubled from 12.6
percent in 2003 to 22.5 percent in 2016, topping out at nearly $3
trillion.
To help seniors deal with increasing debt, Sullivan offers some options:
Credit counseling: The AARP has reported that people over 50 with
credit card debt now carry higher balances than those under 50. They
often use credit cards as backup for basic living expenses, medical care
and emergencies, underscoring a worrisome trend. Credit
counseling is a free service that can help seniors develop a
realistic budget and identify personalized solutions to eliminate debt.
Student loan counseling: The Consumer Financial Protection Bureau
reports the number of Americans age 60 and over who carry student debt
quadrupled from 2005 to 2015, with average debt ballooning to $23,500.
Forty percent of debtors over age 65 are in default, often losing access
to Social Security to recoup unpaid student debt. Seniors with student
debt have reported that loan servicers are not forthcoming about loan
repayment options and fail to provide borrowers with access to loan
information. Student
loan counselors can help match seniors to the best repayment option,
interface directly with servicers and help handle all of the legwork.
Home Equity Line of Credit: HELOCs typically offer a lower
interest rate than most credit cards, and borrowers may qualify to
deduct HELOC interest. Like other loans, a HELOC will need to be repaid,
but it may be preferable to credit card or other debt.
Reverse mortgage: Though not ideal for everyone, a reverse
mortgage enables homeowners 62 years and older to convert part of their
home equity into tax-free cash to cover living expenses and debt
repayment. A reverse
mortgage counselor can help determine if this is the right solution.
Bankruptcy: Though always a worst-case scenario, bankruptcy may
be the most appropriate solution for older people who are losing the
battle with debt. A nonprofit credit counseling agency can help seniors
determine if bankruptcy
is the right route, or if debt management could work.
Consumers seeking relief from credit cards, student loans or other debt
can visit takechargeamerica.org
or call (877) 784-2008.
About Take Charge America, Inc.
Founded in 1987, Take Charge America, Inc. is a nonprofit agency
offering financial education and counseling services including credit
counseling, debt management, student loan counseling, housing counseling
and bankruptcy counseling. It has helped more than 1.6 million consumers
nationwide manage their personal finances and debts. To learn more,