Credit Cards: Your Parents Can Be The Victim Of Credit Card Debt |
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Credit card debt and bankruptcy is rising among senior citizens. There's nothing like statistics to sanitize a real-life tragedy. For instance David Henderson's father, age 83, has managed to ring up credit cards debt on ten to twelve cards totaling close to $100,000. His annual interest is almost $20,000. David is desperate to find a way to keep his father from filing for bankruptcy. Like David many people are worried about their mom or dad's debt situation. There is a growing number of senior citizens facing debt; statistics tell us that more than half of those over the age of 65 who carry credit cards carry balances from month to month Experts are firm believers that a variety of points of view are exponentially better than just one. Let's forget macroeconomic trends and pollsters' modes, medians, and means and consider one 83-year-old man facing a six-figure mountain of credit cards debt and the possibility of declaring bankruptcy. Here is what David and other people who are facing the same problem can do: There are times when parents and children swap roles -- an often-uncomfortable power handoff Like David many people know the extent of their mom/dad's credit cards debt, it's assumable that you are talking frankly about the situation with your dad. First, assure your dad that his problem is more common than he may suspect. Rising health-care costs, longer life spans, and low interest on income-bearing investments have put senior citizens on high money alert. If you haven't already, get to know Dad's debt. What are his balances on each credit cards, and what are the interest rates he's currently paying on his credit cards' With dad's obligations listed out, you can plan a course of action. Depending on how involved you want to get, you can either present him with options for paying down his debts and let him take it from there, or you can tackle the problem together. There's a lot you/your dad can do on your own to help ease the sting of high interest and huge debt. Start with negotiating lower interest rates with your father's current lenders. Next roll over debts from higher-interest credit cards to those with lower rates. Review other assets -- such as life insurance, retirement accounts, a home equity line of credit, a reverse mortgage -- and see whether it makes sense to tap those to reduce debt payments and free up some cash for living. Here Are Few Other Considerations: If your father has a spouse, the worst thing that could happen is that she is left with the debt should the unthinkable happen. So check to see whether she is a joint account holder on those credit cards (or other loans). Same thing goes for any co-signers on the card. If you or one of your siblings is a co-signer or authorized user on any of those accounts with balances, you will be responsible for the debt when your father passes away. The way most credit cards debts of the deceased are settled is through the estate -- selling off the house or other assets to settle outstanding debts. People have seen this horrible situation play out time and time again, where someone passes away intending to leave something of value to their survivors and instead the estate must be liquidated to pay off debts, sometimes forcing a widow to move from her longtime home. So, if you have ten to more credit cards like David's father and you are not able to make their payments on time, the best way to solve your problem is enroll yourself for debt consolidation program. Before you sign up for any debt consolidation program, read the fine print. Understand the fees. Don't ever sign over full reign of a paycheck or bank account. And make sure your father agrees only to repayment terms that he can manage. You don't want your father to go into a debt repayment program and end up in worse shape than when he began. Bankruptcy is the last resort to solve your credit problems. It can be complicated and can be long-term credit blight, but it's sometimes impossible to avoid. Employ a good bankruptcy attorney and make sure your father understands all the details and ramifications before taking this course of action. Finally, you can avoid bankruptcy by keeping less number of credit cards and using them prudently. Don't Despair! You are not alone and you'll definitely find people in the same financial situation as your father -- and you -- many who have tried credit counseling and others who are die-hard do-it-yourselfers. The great way to get out of it is managing your credit cards. You can do it on your own or you can also take the help of credit counseling agencies!!! |
