My aging parents have a lot of debt they can’t pay back. What can I do to help?
As our older generation is getting ready for retirement, many of the safety nets that previous generations had are slipping away. While your great grandparents probably had a pension, Social Security benefits, a lifetime of savings, and no debt as they entered retirement, odds are good that your parents only have one or two of these sources of income.
As costs for basic essentials continue to rise, many seniors are turning to credit cards to make ends meet every month. For many of them, however, the minimum payments on these cards soon becomes too difficult to manage. Without the ability to go back to work, this debt can quickly become a problem.
If you’re hearing about the problem debt because your parents can no longer afford to pay their bills, then you’ll need to act quickly. Start by reviewing the debts that they have. Work with them to create a list of the credit cards and other debts, then create a separate list of their monthly bills and income. Determine if they are able to make any cuts to pay off their debts.
If they can’t make any cuts, then your next priority needs to be getting rid of the debts. If you can’t contribute any money and they don’t have any savings, then their choices are to file for bankruptcy or look into a debt consolidation loan. Bankruptcy can be a scary word to many seniors; it often conjures up images of being kicked out of their home and having their possessions taken away. While today’s bankruptcy courts won’t force elderly citizens out of their homes, it might be a good idea to talk to a debt counselor about a debt consolidation loan before looking at this option.
<p data-sp-element=”content”>With a debt consolidation loan, your parents’ debts will be combined into a single loan with a lower interest rate and longer payment term than their current debt. That will give them a debt payment that they can afford on their income. Since payments can be stretched out for years, it’s possible to get their payments down to a fraction of what they’re currently paying. Ultimately, this might be the best solution, since it allows them to avoid bankruptcy and work towards paying off their debts without a lot of sacrifices.