Older Americans desperately in need of debt relief
A financial industry report recently noted that delinquent payments on credit cards appear to be falling to their lowest levels in 15 years. The American Bankers Association report said that the delinquency fell to 2.47 percent in the fourth quarter of last year, their lowest level since 1994. Analysts said the report is a sign that consumers are getting their personal debt under control.
But some groups of Americans are still seriously in need of debt relief. Another study recently showed that Americans over age 50 have significantly more credit card debt than younger people. According to the AARP’s Public Policy Institute, older Americans carry an average credit card balance of $8,278, compared to just $6,258 for people under 50.
A big part of the reason for this difference, analysts say, is that older people have more medical debt. There is also the loss of income that comes with retirement. Sadly, some of this debt is also caused when elders give money to help their younger relatives with their own financial woes.
Whatever the causes, credit card and other kinds of debt can be worse for older Americans simply because they have less time left in their working lives to pay it off. Age also can bring health problems that make it harder to get a handle on finances. And when it’s not paid off, the interest on old debts builds until it begins to seem insurmountable.
Fortunately, there are ways to manage, decrease and sometimes eliminate debt. Creditors are sometimes open to negotiating a better repayment plan. For some older Americans, filing for personal bankruptcy can be a powerful and effective tool for getting out of a debt trap and getting a fresh financial start for the later stages of life.
Source: New York Times, “For older Americans, a deepening debt problem,” Carmen Wong Ulrich, March 25, 2013