Credit Card Debt and Age: What Happens When Seniors Can No Longer Pay Their Debt? A New Look

By Eric Olsen, Attorney and Executive Director HELPS Nonprofit Law Firm

Many seniors with credit card debt can’t afford to search for solutions. They see an ad on TV or search the internet and turn to a debt relief company for help. There are scores of these companies with fancy websites, BBB, and A+ ratings competing for business. National Debt Relief, a national debt relief company, published an article on its website in April 2017, “How to Spot a Debt Relief Scam.”

The article identifies criteria that determine if a company is a debt relief scam. Scam companies target “those that are desperate.” They manipulate persons to do something not in their “best interest.” A reputable debt relief company will “learn everything it can about your unique situation.” A debt relief scam company uses a “cookie-cutter approach.” They assume “your situation is no different from that of anyone else.”

The following month National Debt Relief published an article that appears prominently on a search for seniors and debt. The article is titled “Credit Card Debt and Age: What Happens When Seniors Can No Longer Pay Their Debt?”

The article begins by laying out the financial problems of seniors who “can no longer pay their debt” who find “themselves in deep financial trouble late in life.” It goes on, “With little hope of their income rising in the future, this can snowball into a difficult situation.” Adding that “Faced with a mountain of debt, seniors may face severe stress. This could exacerbate medical conditions and/or affect their quality of life.”

The article then identifies potential consequences. Family members, “Many times, … must choose between keeping their loved ones home and paying other debt.” Sometimes families “are afraid they will be responsible for credit card debts once their loved ones pass away.”

National Debt Relief concludes, the “future could look very bleak for some, but solutions exist to help.” The first solution is that family members help with payments or extend loans. Next, refinance a current home mortgage or take a loan out against the home’s equity. Apply for a reverse mortgage or divest of assets. Every solution involved the payment of the debt. The practicality of these solutions for seniors in “deep financial trouble” isn’t addressed. The final solution was to recommend “debt relief companies, such as National Debt Relief….”

However, National Debt Relief doesn’t mention any of the unique laws that protect seniors with financial difficulties. Specifically, federal law protects Social Security, pensions, disability, and VA benefits. This income can’t be garnished and is available for a senior’s needs. Because it’s protected, these funds do not need to be used to pay old debt. A federal law called the Fair Debt Collection Practices Act provides means to stop unwanted collector contact by mail or phone. States have exemption laws that protect a senior’s equity in a home and other assets from creditors. Unsecured judgment creditors do not “foreclose” on a person’s homes for many reasons. A senior doesn’t have to sell a home to pay credit card debt. No law requires a family member to pay a deceased parent’s credit card debt. Learning this, a senior could conclude that National Debt Relief’s help isn’t needed. That might be in the senior’s best interest but not that of National Debt Relief.

Instead, National Debt Relief uses the same “cookie-cutter,” “one-size-fits-all approach,” it says defines a debt relief scam. It completely ignores discussing the unique laws and protections for seniors with debt. National Debt Relief isn’t alone. HELPS Nonprofit Law Firm has found that it’s the practice of both for-profit and nonprofit debt relief companies never to tell a senior their income is protected. They look after their financial interest enrolling persons and collecting fees. Because of this, seniors are often placed in utter poverty, some going without food and medicine, making payments to a debt settlement company.

HELPS is a national charitable nonprofit law firm. Our most important message to seniors is that federal law protects their Social Security, Pensions, Disability, and VA benefits. It doesn’t need to be used to pay old debt they can’t afford to pay. There are means whereby seniors can be protected from debt collector harassment. We educate seniors on how they can maintain their financial independence. Learn more about HELPS by visiting our website at www.helpsishere.org or calling HELPS toll-free at 855 HELPS-US. We turn no senior away that needs the help that we offer.