How can the elderly stop paying credit cards debts?
Bankruptcy. Sometimes, it's best to just eliminate debts altogether through bankruptcy. This can effectively erase credit card debt, medical bills, utility bills, and other types of debt. With Chapter 7 bankruptcy, one can liquidate assets to pay off debt, except for child support, alimony, and similar forms of debt.
Many seniors are “judgment proof,” which means their income is derived from retirement, Social Security, or other accounts that can't be garnished. Debt collectors may not bother to take seniors in this situation to court, since they're unlikely to get the money that way.
Please understand that debt collectors are legally prohibited from garnishing Social Security income or benefits. Also, most retirement accounts are exempt from garnishment related to unpaid debt. Some debt collectors threaten that they will file a lawsuit to obtain a judgment to garnish income as an added punishment.
Seniors may be able to get their payments lowered if the debt is federal or PLUS. Try options such as an income-based repayment plan or a discharge. Also consider deferment, forbearance, or consolidation.
If you fail to pay at all
Rather than sending the debt to collections, the credit card issuer may take legal action against you by filing a lawsuit. By suing you for the debt, they will ask a judge to require you to appear in court, and the creditor will seek a court injunction or judgment against you.
Are Social Security Benefits Protected? Federal income retirement benefits are protected from commercial garnishment through the federal Consumer Credit Protection Act. This means Social Security and other federal benefits can't be garnished by credit card companies, for medical bills, and other commercial creditors.
While debt collectors cannot have you arrested for not paying your credit card debt, creditors can still use the legal system to make sure they get their money back. The most common legal recourse is to sue you for payment. If you get sued for unpaid credit card debt, don't ignore the lawsuit.
The short answer is NO. Debtors' prisons, as they were called in the past, no longer exist. According to the Fair Debt Collection Practices Act, collectors are prohibited from threatening prosecution or jail for credit card debt.
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
If you owe money for most other debts like credit cards and medical bills, you (usually) did not sign a security agreement. So, the creditors cannot seize your home to pay the debt. But, if you want to sell your home and creditors have filed judgments for unpaid debts, you may need to pay those debts before the sale.
Is there a government credit card debt relief program?
Unfortunately, there is no such thing as a government-sponsored program for credit card debt relief.
| Generation | Ages | Credit Karma members' average total debt |
|---|---|---|
| Millennial (born 1981–1996) | 27–42 | $48,611 |
| Gen X (born 1965–1980) | 43–58 | $61,036 |
| Baby boomer (born 1946–1964) | 59–77 | $52,401 |
| Silent (born 1928–1945) | 78–95 | $41,077 |
Seniors who reside in an assisted living facility and run out of funds will be evicted. Elderly individuals who are unable to turn to family for financial support and have no money can become a ward of the state. This may be the case if the senior develops a health emergency and is no longer able to live alone.
Can I go to jail if I don't pay my credit card debt? NO. You cannot go to jail simply for failing to pay your credit card debt. It is also illegal for creditors or debt collectors to threaten you with arrest or any kind of criminal penalty to try to get you to pay.
You may lose the ability to dispute the debt, if you believe you don't owe it or that the amount is wrong, and depending on your situation and your state's laws, the creditor may be able to: Garnish your wages. Place a lien against your property. Move to freeze funds in your bank account.
- Step 1: Stop taking on new debt. ...
- Step 2: Determine how much you owe. ...
- Step 3: Create a budget. ...
- Step 4: Pay off the smallest debts first. ...
- Step 5: Start tackling larger debts. ...
- Step 6: Look for ways to earn extra money. ...
- Step 7: Boost your credit scores.
If Social Security benefits are your only source of income, private creditors and debt collectors have limited options to get their money. They can't garnish your Social Security income and they can't levy your bank account as long as it only contains Social Security income that was put there via direct deposit.
Many federal benefit payments are not subject to garnishment in most cases. These payments are known as exempt funds: Social Security benefits.
A creditor won't be able to locate and garnish it. Prepaid debit cards are a relatively new concept. There are simply no procedures in place for judgment creditors to access information in order to garnish those types of accounts.
Most negative items should automatically fall off your credit reports seven years from the date of your first missed payment, at which point your credit score may start rising. But if you are otherwise using credit responsibly, your score may rebound to its starting point within three months to six years.
How do I legally discharge my credit card debt?
Chapter 7 bankruptcy: This fairly quick legal process can wipe out your unsecured debts through what's called a “discharge.” Chapter 13 bankruptcy: Chapter 13 can also result in a discharge, but typically only after you complete a 3-5 year repayment plan.
Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt. State where you live.
In most cases, the statute of limitations for a debt will have passed after 10 years. This means a debt collector may still attempt to pursue it (and you technically do still owe it), but they can't typically take legal action against you.
If there's no money in their estate, the debts will usually go unpaid. For survivors of deceased loved ones, including spouses, you're not responsible for their debts unless you shared legal responsibility for repaying as a co-signer, a joint account holder, or if you fall within another exception.
Even if you owe money, debt collectors aren't allowed to threaten, harass, or publicly shame you. You have the right to order a debt collector to stop contacting you, and they must comply. If there's a mistake, and you really don't owe the debt, you can take steps to remedy the error.
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