Bankruptcy can be a devastating event emotionally as well as financially. The feeling that one cannot meet one’s obligations can often lead to depression and a sensation of worthlessness. This can be particularly hard on senior citizens, who may feel helpless in the face of mounting bills, since with their working lives over, the situation may seem hopeless. It is more difficult for senior citizens to get jobs even when they are physically able, and in many cases they are indeed not able to sit or stand for many hours each day, or do other tasks routinely required of working Americans.
Thankfully, the situation for senior citizens deep in debt is not as hopeless as it may appear at first. The AARP (American Association for Retired Persons) has been at the forefront of efforts to organize and deliver credit counseling or debt consolidation services specifically designed for senior citizens. These provide important alternatives to bankruptcy because they can allow the elderly American to reorganize debt so that it becomes possible to keep up with the payments and thereby retain one’s good name in the financial world.
Although the AARP has done its best for seniors in this country, other businesses and firms, not to mention outright criminals, make it a practice to take advantage of senior citizens. Sometimes such individuals or businesses go even further and actually cheat the elderly. Therefore, it’s vital that seniors interested in credit counseling or debt consolidation seek out firms that have sterling reputations.
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The Better Business Bureau is an excellent place to start. Check a firm’s record. If the BBB has no record at all of the firm, stay clear. If there is a record, investigate it carefully. Be especially vigilant about checking for consumer complaints. What is the complaint rate, and what do the complaints allege exactly? Another feature of the BBB website to consult is the bureau’s own rating of the business. Look for one that is rated with an A.
Credit Counseling or Debt Consolidation?
Credit counseling refers to services to assist seniors to understand their debt level and help them learn how to manage it. Reputable firms will offer services such as negotiating with credit card companies to lower interest rates, which will in turn lower minimum monthly payments and make the debt load more manageable. No company can completely erase your debt. Many claim to be able to do this for a fee. Such companies will pocket the fee and make your financial situation worse, not better.
Debt consolidation services are appropriate for senior citizens who need more extensive assistance. These companies will collect all or most of your loans together into one package and arrange a new loan for the whole amount, but at a lower interest rate. Existing creditors will be paid off and afterwards, the borrower will have just a single payment to make each month. This increases the likelihood of the borrower being able to make regular, on time payments.