Best Debt Relief for Seniors
A Quiet Crisis: Seniors in Debt
You may know of or have a senior in your family struggling quietly through a personal crisis, a debt crisis threatening their way of life. This quiet crisis is not always the result of failing to save for retirement or reckless spending, but rather it is about the frequency with which seniors are forced to use credit cards for bill-paying. It’s about families needing to talk to their senior loved ones who may not be aware of the changes in the credit card industry’s regulations. Further, it’s a time for the family to be alert – the Quiet Crisis may be a wake-up call; chances are, if finances are off track, something else may be as well.
There has never been a more confusing time in history for our seniors as it is today, with reputable institutions once thought of as rock-solid giving way to staggering change daily. This is the age group, our seniors, who take pride in paying bills on time and count on a high moral standard with business dealings. So when their credit card balance spirals out of control and the household budget begins to be impacted, they may be too proud or independent to let you – the family – know their finances are in trouble. More than likely, your senior may not even understand what is happening.
“I hear this story over and over again,” Nancy Alberts says, Certified Senior Advisor, with Moving On! Services LLC. “I don’t know how my credit balance got so high!” Moving On! Services is a personal property disposition company that performs, manages, or assists with various services such as downsizing, organization, moves to retirement or assisted living, and providing expertise and resources to seniors and their families. The company also helps caregivers create a healthy, safe environment by structured downsizing.
Moving On! Services serve all of Hampton Roads and assist families located throughout the nation. “I constantly research senior services to be aware of resources for our clients,” Nancy continues. “For instance, the National Council on Aging shows 29% of homeowners over 62 have difficulty or need help with one or more activities or instruments of daily living to include money management, toileting, eating, bathing, shopping, cooking, cleaning, and using the telephone.”
Bill-paying is a genuine issue in our aging population; in actuality, all of us will need assistance at some point. Deteriorating health is a significant factor. Bill-paying may be delayed during an extended hospital or rehab stay, affected by failing sight, or forgotten as dementia slowly creeps into the picture.
As medical and living costs continue to soar, our seniors use credit cards to pay for doctor visits, medical tests, prescriptions, and gas, as well as unexpected expenses. Many insurance companies require prescriptions to be filled by mail order and require a credit card for payment.
Credit card companies can change due dates and various fees and interest rates that leave the consumer bewildered and struggling to keep up. For instance, interest rates are charged according to the type of transaction (purchases, transfers, ATM/debits, etc.). When combining the different interest rates, it is not uncommon to see a statement’s total interest rates pushed to over 50%. Additionally, invoice mail dates – received dates may change from month to month, creating a trap that causes consumers to make a “late” payment.
There are no more grace periods. Late payment of even one day adds a penalty fee to a balance, which in turn automatically triggers an increase in an interest rate and possibly a balance over the credit limit – resulting in still another “finance” fee. All of which are added to the balance, accruing interest at those different rates.
To further complicate things, a late payment can make you vulnerable to a term known as “universal default.” Universal default can affect any loan, credit card, or line of credit that participates in such practices and means that one late payment sets off an interest rate increase across the board with all accounts.
Additionally, suppose a senior elect to transfer amounts from other lines of credit to take advantage of a special interest rate such as 0%. In that case, they need to be aware that the special interest rate is suitable for only a short period and allows for all the additional fees associated with such a transaction.
Transfer fees, service fees, and miscellaneous fees, such as promotional fees, can be attached to the transfer.
More than likely, your senior is paying on time. But, if they can only handle the minimum payment, they will hardly put a dent in the transferred balance.
Suppose they also use the credit card for day-to-day purchases and cash withdrawals. In that case, a minimum payment is first applied to the interest, any fees, and purchases, so the likelihood of ever paying off the transferred balance becomes even more difficult. Soon the special transfer balance of 0% interest expires and increases to a new interest rate, often 20% or more.
Credit card interest and associated fees have an enormous negative impact on our seniors’ ability to live within a fixed income. Already 40% of retirees between 67 and 80 suffer a decline in revenue and assets, as shown in a 2007 study by the Center for Retirement Research at Boston College. Today, 85-year-olds are the nation’s fastest-growing age group increasing at five times the state’s projected growth.
By 2025, the Virginia Department on Aging expects to have 25% of the state’s total population in this age demographic. And the situation will only become more significant as baby boomers age – one turns 60 years old every 8 seconds, and they are retiring at the rate of 10,000 per day!”
Whatever the circumstances, the results are the same. When payments are late, new bills reflect eye-popping finance charges or penalties, three or four different interest rates are applied, an ever-higher minimum amount is due, and a considerable balance becomes unmanageable.
During consultations with Moving On! Services, families ask, “What do we do now that my parent can’t pay the bills? Am I responsible for these credit card balances?”
“No, unless you are a joint cardholder, attorneys have advised me that you are not required to pay their debt,” Nancy responds.
The family should know that there are options and resources to get finances back on track. The following are suggestions to assist your senior to take control, to be aware, and follow up:
• Be aware! Look at the bills check due dates, interest rates, and minimum payments. Keep a log of charges, balances, due dates, and fees. Organize – make a file folder(s) for each account and learn to read the statement for changes in due dates and interest rates.
• Pay the total balance: Doing so doesn’t allow interest or fees to impact monthly expenses.
• Know who they talk to or see: scam artists, friends, family members, and others can be abusive both physically and financially.
• Unknown callers may not be who they say they are. Urge your senior not to give personal information over the telephone and not admit to or discuss debt over the phone. Urge your senior to write down the date of any call, the caller’s name, company, and telephone number and extension. Request the unknown caller to mail any information in writing about the alleged debt and hang up.
• Stop the harassing calls – Under the Fair Debt Collection Practices Act, your senior can tell collectors to stop calling. Help your senior compose a letter asking collectors to stop calling. Mail it registered, return receipt. The Act says that debt collectors can only call to say they intend to take a specific action. Your senior does not have to discuss personal information.
• If telephone calls continue, if interest rates and fees are absurd, write down the time, date, caller’s name, and company name, and either you or your senior should report the information to the Virginia Attorney General’s Office. Don’t be quiet; do not accept abusive calls, interest rates, or fees.
Call, write and complain, complain and complain – loudly and often. What to say: Be polite – the department you are calling is helping you!
Be sure to have all of the information ready, copies of each month’s statements along with your log of when you were called and by whom. Report the number of fees, interest, and payments. Let them know the costs are so exorbitant that your senior cannot pay their day-to-day expenses such as utilities, car insurance, prescriptions, or food.
Call the Virginia Attorney General’s Office of Consumer Affairs toll-free at 1-800-552-9963, write to Office of Consumer Affairs, PO Box 1163, Richmond, Virginia 23218; or fax the letter to 1-804-225-2666.
– Write your elected officials: email at www.house.gov and www.senate.gov
– File a complaint with Banking Regulators at www.ftc.gov
– File a complaint with the Better Business Bureau at www.bbb.org
– Call and complain to the US Comptroller of the Currency at 1-202-874-4700
• Call the credit card company’s legal department, request lower interest rates, or arrange for reduced payments on a set day each month. Your senior must be present to permit you to discuss the account and make payment arrangements. Follow up by writing a letter stating the agreement. If there are multiple calls, write numerous letters. Keep a copy of every letter.
• Contact professionals. Make an appointment for your senior to see an Elder Law attorney or an accountant for advice. Also, if your senior is receptive, take the time to discuss making legal arrangements simultaneously (Living Will, Power of Attorney, Advance Medical Directive). Laying this foundation ahead of time is the perfect proactive measure that puts things in place before an emergency.
• Contact a professional services organization. Nancy Alberts, Certified Senior Advisor, Moving On! Services www.movingonservices.com, licensed, insured, and bonded ~ since 1999, can be contacted by calling (757) 393-1622.
Moving On! Services assist families with the organization in the home and with downsizing for your senior and the caregiver to have a more efficient, safe, or healthy environment.
A licensed and insured companionship care company can be considered; it offers assistance with on-time bill paying; they prepare the checks for the senior to approve, sign, and mail. This type of assistance allows seniors to retain independence and control.
• Take your senior to their bank to arrange automatic bill payments on set dates so that the minimum payments will always be made on time. The bank may arrange an equity loan, negotiate a settlement, obtain a fixed payoff for the credit card balances, and provide other specialized senior services.
• Accompany your senior to their primary care physician. HIPPA (privacy) laws require your senior’s permission to discuss and release any health information. Have your senior obtain a doctor’s letter documenting any limiting physical impairment, dementia, or condition that necessitates assistance, such as arthritis in the hands. Be ready to provide this information to the attorney or the bank if necessary for them to negotiate settlements.
• Put your senior on the No-call list for telemarketers – register on www.donotcall.gov
• Notice the mail; if it remains unopened, piles up, or has multiple responses to contests, something of more profound concern may need your attention. Never assume that it’s all okay as there may be other problems.
• Watch for inappropriate purchases – beauty and health products, subscriptions, or 21 sets of sheets.
• Communicate, Communicate, Communicate with your senior. It is the single most powerful tool that will keep you, the family, in touch with your senior and allow you to address critical issues before they turn into a crisis.
• Always remember, it is still their money, and they have the right to choose, make mistakes, and retain their independence as long as possible.
Certified Senior Advisor (Ret.)
Moving On! Services LLC
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Moving On! Services LLC services all of Hampton Roads to Richmond Virginia, Central Virginia, and areas east to include York and Gloucester County, and the Eastern Shore. MOVING ON! provides a Single Point of Contact for as much or as little that needs to be done – related to the disposition of household items and personal property. First consultations are always free.
Our services include Downsizing Lifestyle Change, Appraisals and Auctions, Estate Liquidations, and Senior Move Specialists. Above all, we have the expertise for Aging in Place services. For example, Personal Shopping, Errand, Sort, Space Planning, Pack, Move, Unpack, Redecorate, Reorganize, Charitable Donations, Books & Bibles, Disposal of Surplus Possessions, Deep Cleaning, Organizing, and Redecorating.