|
  Dear
Debt Adviser,
I have $7,000 in personal and credit card
debts. My only income is $540 from Social Security. My children
take care of other expenses. Still, I seem to be able to pay
the minimum. What do I do, other than shoot myself?
-- Carol
 Dear
Carol,
I hear your frustration and the growing number of seniors facing
debt issues share your concerns. There is a common misconception
out there that seniors have fewer debt issues than the younger
population. This is not so. They only have less time and fewer
resources to deal with the same problems so many of us face.
I'm sure we can work out a much better solution than the alternative
you have stated.
The most important thing for you to do immediately,
if you have not already done so, is stop adding to your existing
debt of $7,000. As you have found, it is hard enough to get
out of debt on a fixed income and it is only made more difficult
if additional charges are added.
The next thing I would recommend is really difficult
and may be embarrassing. Sit down with your children and create
a monthly spending plan for yourself. Because your children
are helping you meet expenses, I would include them in the
planning. If they are not aware of your personal and credit
card debt, now is the time to tell them because you are going
to need their help. Due to the fact that your monthly income
from Social Security does not currently meet your expenses
and most likely won't any time soon, it is important for all
involved to know how much additional income you require for
the short and long term.
Here are some options for dealing with the debt
payments:
- If you are a homeowner, consider tapping
the equity in your house through a reverse
mortgage, cash-out
refinance mortgage or a home
equity loan or line of credit.
- Contact your creditor, explain your situation
and ask them if they have a hardship program that will allow
you to reduce the payment each month.
- If your children are financially able, they
can pay off the debt now and save the interest charges that
would otherwise add to the payoff amount.
- Determine how much additional money is available
to add to the minimum you are currently paying and make
the largest payment you can each month. As little as an
additional $10 will make a big difference. You can see the
results of adding payments by using Bankrate's "What
will it take to pay off my credit card?" calculator.
Since you are making the payments currently,
I would not recommend trying settlements or bankruptcy. Those
are more desperate measures for more desperate times.
Lastly, I would recommend you explore any unexplored
avenues to increase your monthly income. You may have already
exhausted all of these avenues, but more and more seniors
are finding both a renewed sense of purpose and some extra
money in re-employment.
Good luck!
The Debt Adviser, Steve Bucci, is the president
of Consumer Credit Counseling Service of Southern New England.
Visit CCCS
for additional debt
advice or click
here to ask a debt question.
|
