(ARA) – Younger generations have long looked up to their elders as paragons of good financial common sense. The “Greatest Generation” managed to get through the country’s toughest economic conditions with a dogged attitude about saving and minimal spending. So it’s surprising to find out that many seniors are facing high levels of credit card debt.
A study by the University of Michigan Law School showed that 7 percent of the people filing for bankruptcy between 1991 and 2007 were aged 65 and older – the fastest growing age segment to file. Two-thirds of older Americans pointed to high credit card debt as their reason for choosing to file bankruptcy and seniors had 50 percent higher credit card debt than younger people who were filing.
Contributing factors to this trend include the rising cost of medical care and decreased income after retirement. Many seniors also deal with the loss of a spouse and subsequently the loss of a secondary, or even primary, income. Seniors also may be hesitant to talk about their financial issues, not wanting to be seen as asking for help.
With a growing number of seniors filing for bankruptcy, it’s apparent that many feel powerless to get out of debt. However, there are options available that are not as drastic as bankruptcy.
Financial expert and best-selling author David Bach stresses that it is possible for many seniors to overcome their debt, without declaring bankruptcy.
“Bankruptcy should be a last resort,” Bach says. “And that means you need to know about your options to pay off debt before you come to the conclusion of filing bankruptcy. It’s easy to feel overwhelmed by debt, but there are smarter ways to eliminate it.”
Bach, whose latest book, Debt Free for Life: The Finish Rich Plan for Financial Freedom, outlines a plan for getting out of debt, points to Debt Wise, an online tool from credit reporting agency Equifax, as one of his favorite methods to help oneself get out of debt.
“I like Debt Wise because it uses the same methods I’ve been teaching for decades to help people pay off their debts faster and save on interest, but it does so automatically,” says Bach. “The tool pulls the debts listed in your Equifax credit report so you can set everything up in a matter of minutes, keep yourself on track and monitor your progress.”
For seniors, it might seem like it’s too late to tackle debt and that the only way out is to choose bankruptcy. However, by utilizing a system to prioritize debts and structure a payment plan, seniors can often get out of debt – credit card or otherwise — without turning to bankruptcy. For this fiercely independent segment of the population, using a simple tool that can help them overcome debt can offer a new lease on life.