The payments on the debt will certainly decrease, but again, if nothing changes in the way of income and expenses, credit card debt could begin to accumulate once more. The future could look very bleak for some, but solutions exist to help. They have made my life so much easier, taking a lot of stress off. Privacy Policy, Essential news and expert tips in your inbox every week. National Debt Relief Alternatively, they may be able to act as an intermediary if debtors are calling or if accounts have gone into collection. Privacy PolicyYour credit cards journey is officially underway.Keep an eye on your inbox—we’ll be sending over your first message soon. SHAWN: My experience with National Debt Relief is -- I'm very happy to be working with them. But if you are struggling and your kids need food and your marriage is at stake and you lost your job, then simply stop paying your credit card debt and follow the process I describe above. I'm a...". Card debt past the statute of limitations? If their illnesses are significant and debilitating, they may end up in a nursing home or other long-term care facility. As a disabled 84-year-old person, what are my mother’s rights? A debt collector might accept 75% of your $3,500 credit card debt, for example, or might agree to an 18-month payment plan for the $2,000 you still owe on a personal loan. I read somewhere that if a person is unable to pay a debt due to certain situations, such as mental impairment, away at war, or in prison, the debt can be placed on hold. Funds from the estate go toward paying back the loan, as well as the interest on the amount borrowed along with any fees. April: So would you say that's almost halfway through, most of the way through or that you're still kind of beginning stages of it? Yes, you still owe it. See the online credit card applications for details about the terms and conditions of an offer. I consulted a bankruptcy lawyer, and he suggested we stop paying … Those who inherit the asset must continue making payments to keep from losing the asset to repossession or foreclosure. However, at this stage of life your dad can’t work and replace the money in his 401(k) plan, and his medical needs and daily care are a higher priority than paying credit card debt. Seniors who apply for a reverse mortgage also need to have decent credit scores and verifiable income. While many seniors may be feeling embarrassed and discouraged by their credit card debt problem, they would be wise to share the burden with those who love them. SHAWN: Yes. Mom is in nursing home and cant pay her credit card debt. 4 Debt Management Money Saving Experts To Make Sure You Follow. What if your credit card payment could be lowered, and fixed at a more affordable monthly amount? National Debt Relief - A+ BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans. Real estate taxes must be up-to-date, and the house must be in good condition. Offer to go over bills with your parent. It's a 1-6 year process. Be Sure You Know Whom to Pay Paying off high-interest debts such as credit cards will likely be impossible. Depending on your mother’s financial situation, there’s a chance she may be declared “judgment proof,” which means her creditors may have no legal recourse to collect a debt from her should she decide to stop making payments. This could affect the total liquid assets of the estate in a negative way. They also cannot come after your children unless they co-signed the credit card or accepted liability in some other fashion. Once a budget is made, seniors should take stock of how they pay bills … April: Since you started with National Debt Relief, what was your thoughts on the cost in relation to the quality of service you received? Another option is that the siblings could pitch in to pay off or settle these debts. 1. Secured debt, backed by something tangible, such as a car or a house, is an inherited debt. It often sends a clear sign that they can longer be independent and must rely on others to get by. Other factors, such as our own proprietary website rules and the likelihood of applicants' credit approval also impact how and where products appear on this site. Many times, they must choose between keeping their loved ones home and paying other debt. Adjust your lifestyle. When it comes to paying off credit card debt, there’s no better way than the debt snowball method: Step 1: List your credit card debt from smallest to largest (don’t worry about interest rates). Meets and exceeds whatever expectations I had. What Is Credit Card Churning And Should I Try It? However, more importantly, many seniors could find themselves in deep financial trouble late in life. How to Legally Stop Paying Credit Cards. Family members who are financially savvy may have creative solutions they can bring to the table. Again, there are a few exceptions such as joint accounts and, sometimes, medical bills. See related: Protecting the elderly from credit card collectors, 5 tips for taking to elderly parents about credit card debt. Dear Michael,I am so sorry that you and your mother are going through this. Before you react to how much risk you have if a creditor sues you in order to get paid, consider whether that can be avoided. How to Pay Off Credit Card Debt. When you click on There may be some older debt out there you may not be aware of, but it will be on the credit report. I have copies of these emails. Step 1. There are some immediate steps senior citizens can take to address revolving credit card debt. If they are no longer able to live on their own, their families will need to make a whole host of decisions. Should I contact the credit card companies for a settlement? Prioritizing payments. Carefully consider how to spend the proceeds from certain assets. Caller: April With the Baby Boomer generation moving into retirement age, the elderly population in America will rise rapidly over the next couple of decades. Because I could not keep a flow, I couldn't pay bills. If they have owned their home for a long time, they may have a short period left before paying it off. April: Where would you rate them on a scale of one to five, where five star says you'd recommend them to your friends, to one star saying you're very dissatisfied? What options do seniors have to help them manage their debt? April: How would you summarize your experience in just a few words with National Debt Relief? This can help with financial and estate planning. April: Would you like to receive an email with a link to that review, so you can also see yourself and also make adjustments if you wish? Unaffordable credit card debt, debt collector threats, collection attorney letters, debt lawsuits, court judgments, bankruptcies; too many older consumers on a fixed income find their security threatened by or perhaps even already lost to credit card debt they cannot afford to pay. to maintain accurate information. I had a few hiccups in employment, post-COVID. A debt management plan offered by a credit counseling agency is designed to pay off the debt in five years or less. Debt among seniors skyrocketed in the last decade, up an estimated 83%, according to Federal Reserve data. Many older citizens borrowed against their homes to finance other life events, help their children, or pay off credit card debt. These home equity lines of credit (HELOC) allow a borrower to tap into the equity in the home on an as needed basis. Card debt payment options for elderly relatives with dementia, National Federation for Credit Counseling, Financial Counseling Association of America, Protecting the elderly from credit card collectors, 5 tips for taking to elderly parents about credit card debt. The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. April: What had you seeking out National Debt Relief for services? Student loan debt … It made everything far more manageable. SHAWN: Kind of beginning stages. The money goes back to the bank when the home sells, or the borrower dies or moves to another home. You have some options to try to stop credit card company harassment for your elderly parent. Medical costs for seniors will continue to rise as they age, and illnesses associated with old age may make it difficult or impossible to keep working. This can help seniors avoid making mistakes that could have long-term financial impacts. If you have revolving debt on multiple credit cards, you … That's fine. Subscribe to get the week’s most important news in your inbox every week. Once her state’s statute of limitations has been reached, the debt will become time-barred. Again if the property is owned with rights of survivorship, Robin's husband gets the property free and clear of any debts or judgments owed by mom. They may also nix late fees and penalties. Often times, just talking through the situation can be helpful and alleviate stress and anxiety. April: Calls may be recorded. Privacy Policy. The emails you mention will be something to share with whomever you reach out to for legal advice, especially if you do not have a power of attorney for your mother at this time. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs. And they were happy to work with me. However, instead of taking a lump sum amount of money from the bank, borrowers receive the money from the bank in monthly installments. If you apply for a credit card, the lender may use a different credit score when considering your application for credit. All of that said, these options mostly apply to cardholders who are able to manage their debt obligations by themselves. Due diligence is necessary to find the right reverse mortgage to fit the financial needs of the borrower. 5. The Administration on Aging predicts that by the year 2040, persons 65 years and older will represent nearly 22% of the population. By providing my email address, I agree to CreditCards.com’s You also can contact a certified, nonprofit credit counseling agency for help with your mother’s debt. DCSD charges a one-time set-up fee of $125 to $250, depending on the amount of the debt … Senior Citizen Credit Card Debt Relief. One option that may be available to seniors is refinanc… Seniors, sometimes with help from family, should consider all possibilities and do their due diligence to find the right solution. But my guess is that … If things deteriorate, this could also place the home in jeopardy of foreclosure. Due to my moms condition, she is now full time in a nursing home. Seniors can help themselves and their loved ones by being open and honest about their financial picture and their wishes in the event they become unable to make decisions for themselves. She also has three documents from two doctors stating that she has dementia and is unable to manage her affairs. If this is the case, refinancing and extending the term of the loan could be a bad idea. But, as I have stated in previous columns, just because your mother cannot be sued for the debt once the statute of limitations is reached does not mean that the debt is not still owed. Dear Credit Guy. While credit scores are impacted, the impact is not nearly to the extent of a bankruptcy or foreclosure. SHAWN: 5. SHAWN: I'm about a year into the program. SHAWN: Honestly, I don't remember. SHAWN: They're consolidating debt. The debt probably won’t go away as long as your mother is living. The offers that appear on this site are from companies from which CreditCards.com receives compensation. A reverse mortgage allows seniors 62 and older to borrow against the equity in their home. The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Get essential reads every week with our newsletter. There’s really not much that creditors can do if the person stops paying. SHAWN: Yes. In addition, it could mean they will pay much more interest over the life of their mortgage loan. SHAWN: No, that's all right. Depending on where your mother lives, this is usually between three to 10 years. There are several types of reverse mortgages available to senior citizens looking to get cash out of their home. It has not been provided or commissioned by the credit card issuers. By providing my email address, I agree to CreditCards.com’s Other factors, such as our proprietary website's rules and the likelihood of applicants' credit approval also impact how and where products appear on the site. Seniors should engage in frank conversations with their loved ones about their estate and any legal and financial decisions they make late in life. Was it like a one lump sum or did they consolidate debt for you? Help! The credit card companies should write off the debt. Taking advantage of the services of a debt relief company is certainly a viable option for any senior in heavy credit card debt. This is not necessarily true, although some states do hold a surviving spouse accountable for credit card debt. Rolling their debt into a refinanced mortgage may help solve the problem now, but, if income does not increase and household expenses do not decrease, then chances are they will find themselves relying on credit cards once again. ** Audited by: Dianne Ernsting ** Seniors may be too embarrassed to share their debt problems with family and friends, and this could add to their burden. Even with Medicare, the cost of nursing homes and other facilities is very high. Add up all of your credit card bills and then calculate what 2% of that balance is. However, all credit card information is presented without warranty. So that's the reason you're seeking them out? Be sure to ask the credit card company about programs for people in your mother’s situation. Debt management plan: If you’re facing a mountain of credit card debt and not making much progress, a nonprofit credit counseling agency can set up a debt management plan to cut your … Unfortunately, the creditor hardship programs are often for a limited time period, but you have other options to deal with your mother’s credit card debt. Refinancing an existing home mortgage. However, we may receive compensation when you click on links to products from our partners. I Am 5 Years From Retiring With Huge Credit Card Debt! Charge-off accounts are usually sent to a collection agency. If a senior has owned his or her home for a long time, or owes less than it is worth, another option is to take out a loan against the home’s equity. First, you should have a durable power of attorney so you can act as her agent in financial … April: Which program did the National Debt Relief provide for you? Prior to the dramatic downturn in the economy in 2008, money was very cheap to borrow and readily available. Debt management plan: Another option to pay off card debt You also can contact a certified, nonprofit credit counseling agency for help with your mother’s debt. There are no limitations on how you spend the money, so using it to pay off credit card debt is fine. However, she managed to rack up about $15,000 on a credit card that she can no longer pay. It goes without saying that mom can stop paying the credit card debt now. Looking at her finances, I see that she still owes a few thousand on 2 credit cards… They will likely send your mother 1099s since the debt forgiveness is considered taxable income to your mother. Debt relief companies, such as National Debt Relief, help consumers by negotiating with credit card companies to lower the total balance owed. With the cost of living rising at a faster rate than income, seniors often find themselves unable to meet their monthly expenses on income alone. If a relative is unable to take care of credit card debt due to dementia, you have options. April: And do you find that they have worked with you in terms of your payment plan as well? In theory, the credit card company could sue you, but they would collect nothing on their claim. Use any remaining credit limit on your cards to pay essential bills, such as your rent or mortgage, utility bills, day care or buy food. CreditCards.com does not include the entire universe of available financial or credit offers.CCDC has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. Reasonable efforts are made SHAWN: I found it to be very reasonable. Otherwise, the bank reserves the right to call the loan. Things are handled quickly. Debt collectors report accounts to the credit bureaus, a move that can impact your credit score for several months, if not years. (re-aging of accounts) Debt settlement services can … Family members made aware of a debt crisis with their elderly loved ones should be supportive and non-judgmental. In addition, moving debt from an unsecured position to a secured position late in life is probably not in the best interest of the estate. The customer stops making payments to the credit card companies and begins making smaller payments to the debt settlement company. However, there are things to consider.