Consumer Credit Counseling or Bankruptcy for Older Adults?
Do you have an elderly parent or loved one who's currently struggling with debt? For older adults dealing with piling bills and debt in the Chicago area, consumer bankruptcy might help. Each person's financial situation is different, and personal bankruptcy can be complicated. However, the dedicated Oak Park consumer protection attorneys at the Emerson Law Firm have years of experience helping Illinois residents. Contact us to learn more about filing for a Chapter 7 or Chapter 13 bankruptcy.
For Some Seniors, Fixed Incomes Lead to Debt
Are older Americans really struggling with substantial debts? According to a recent article in the Huffington Post, many seniors have turned to consumer credit counseling services to help them manage the debt they've accrued. For instance, one woman, Tracey, described her 77-year-old mother's financial problems and emphasized that credit counseling just isn't working. In her case, her mother is not only struggling with debt, but she's also struggling with memory issues. "Her memory is no longer the best for her finances," the daughter explained, and "she gets confused as to who gets paid what and how much."
To make matters worse, Tracey's mother is on a pretty stringent fixed income. She relies on retirement savings and social security benefits, and those payments don't leave much extra each month. And even though she only uses credit cards to buy groceries and other necessities, the interest rates are high, and she can only afford to make the minimum payments. Indeed, Tracey's mother was worried she may need to find a job to help pay off some of her looming debts.
Tracey pointed her mother to a nonprofit debt consolidation company, which tried to work out payments with the creditors to lower interest rates and required monthly payments. Debt consolidation companies typically work this way. They'll contact a debtor's creditors and propose different types of credit payment plans. Then, the consumer will agree to a set payment amount each month, which will go toward each of the creditors. However, such options aren't great for older adults who are likely to struggle with a set monthly payment amount. So what's left?
Bankruptcy in Retirement Can Provide Debt Relief
If a credit counseling program is going to work, the debtor needs to be able to make the minimum monthly payment and still be able to meet other financial obligations while saving a little bit of money. If this isn't feasible, then debtors, particularly the elderly, will need to look toward alternatives.
What are the alternatives? For most older adults, consumer bankruptcy may be a solution to unmanageable debt. For people like Tracey's mother, bankruptcy may be "the only legal solution available to consumers that can force creditors to either accept affordable payments or eliminate debt altogether." And bankruptcy isn't something that older adults should be scared to think about.
Many people worry that personal bankruptcy will irrevocably damage their credit or their reputations. But in most cases, it's easier than many consumers think to get credit again. It's possible to get a loan after filing for bankruptcy, and it's possible to have credit cards again, too. And for many seniors who have difficulty remembering to make payments on certain debts or can't afford to lower their debt because of a fixed income, bankruptcy may be able to bring some relief. Contact an experienced Oak Park bankruptcy attorney today to learn more about how we can help.
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