Debt Relief for Seniors: Programs and Resources
- Debt relief for senior citizens can come from government aid, help from nonprofits, debt management plans and consolidation loans.
- In extreme cases, bankruptcy might also be an option.
- Watch out for debt relief scams by criminals pretending to be from the Social Security Administration or the IRS.
Debt can be especially stressful for seniors living on a fixed income — and especially common, in the face of inflation and rising health care costs.
Fortunately, there are government agencies and nonprofits to help with debt relief for seniors. There are also ways to tackle credit card debt or medical bills, as well as filing for bankruptcy if you’re very deep in debt.
Government programs for debt assistance
Government programs may help you make ends meet, giving you more room to deal with your debt. Here are just a few options:
- Supplemental Security Income (SSI): If you’re at least 65 years old, blind or disabled and have limited resources, you may qualify for SSI Apply at the SSI site, and if approved, you can get a monthly payment. (Note: This is not the same as Social Security benefits, which are based on your or a family member’s prior work experience.)
- Medicaid and Medicare assistance programs: Medicaid provides affordable health care for individuals with low income, including seniors. Eligibility for Medicaid depends on your state’s guidelines. But there may also be Medicare Savings Programs in your state to help pay for your Medicare premiums. You can check out this Medicare information page for the details.
- Property tax deferral programs: If you own a home but can’t afford to pay your property taxes right now, you may qualify for a deferral program. These vary from state to state and may be certain conditions, like living at your house for a certain number of years or having insurance. You might also need to pay interest on the deferred taxes.
- Low-Income Home Energy Assistance Program (LIHEAP): LIHEAP can help pay your home energy bills, including electricity, natural gas, propane, fuel oil and wood. LIHEAP can also provide weatherization, crisis assistance and heating and cooling equipment repair. Find out more from your local power company.
Nonprofit organizations and community resources
Depending on where you live, you may also be able to get financial assistance from nonprofits or other community resources.
- National Council on Aging (NCOA) BenefitsCheckUp: This free tool lets seniors and disabled individuals connect with locally available benefits, including food and health care. Just go to their site, provide your ZIP code and indicate what kind of assistance you need. You may choose to apply for programs online or call NCOA’s helpline for assistance at 1-800-794-6559.
- Local charities, community centers and organizations: Local options may also be available to provide assistance to seniors in need or connect you with other aid programs, ranging from grocery delivery to housing safety net programs. Search online to see what’s available. In many areas you can also dial 2-1-1 for local aid services.
- AARP Foundation programs: The AARP Foundation can help seniors with low income get government food assistance and Medicare Savings Programs (see above). They can also help you enroll in federal student loan programs and may help you access employment opportunities.
Credit card debt relief
High-interest credit card debt can be crushing, especially for seniors.The average balance for American adults 65 or older is almost $7,500, per a LendingTree study.
To help get your credit card debt under control, you might consider reaching out to a nonprofit credit counseling agency for help. They may be able to help you create a credit card debt payoff plan and explore other options.
You can also consider a debt consolidation loan, which can replace your high-interest credit card debt with a single loan, hopefully at a lower interest rate.
If you have too much debt to handle, even with consolidation, you might want to explore debt settlement. You can attempt this on your own, or work with a debt settlement company — but be cautious, as some charge high fees or may not deliver your desired results.
Medical debt relief
Medical debt can be a heavy burden, but here too, there are debt relief options for seniors. Examples include:
- Hospital-based financial assistance programs: Hospitals and other medical facilities will sometimes give free or discounted health care (also called “charity care”), generally for those who are uninsured or underinsured. All hospitals must have their financial assistance policy information publicly available, including information on how to qualify and how to apply.
- Negotiate your bills lower: You might be able to negotiate with your health provider for a lower bill or ask your insurance company to pay for more. Check out our guide to negotiating medical debt for details.
- Mobile apps/platforms or programs for lowering medical expenses: There are also independent programs to help cut your medical costs. GoodRx and NeedyMeds can both help you get more affordable medications, and NeedyMeds can also connect you with medical transportation cost assistance.
- Medical debt consolidation: If you have multiple medical debts, a medical debt consolidation loan may help by combining them under a lower interest rate. If you have good credit and just need a few extra months to repay what you owe, you could also consider getting a zero-interest balance transfer credit card and paying it off before the 0% interest period ends.
- Medical personal loans: If you don’t qualify for charity care, and you have good credit, you might consider taking out a medical personal loan to manage your medical debt. This can let you have a relatively long term to pay back the money, compared to a balance transfer credit card.
Bankruptcy as last resort debt relief for seniors
If you’re having serious financial difficulties — like not being able to afford basic necessities or facing eviction or foreclosure — and you don’t see another path forward, you might look at filing for bankruptcy.
There are two common types of bankruptcy:
- Chapter 7: This requires you to sell off all your major assets, and in exchange, you get your eligible debts wiped out. You may be allowed to keep some assets, depending on your state of residence.
- Chapter 13: This lets you keep your assets, but you agree to a structured payment plan which lasts three to five years. After you finish the payments, any remaining debt is thrown out.
If you’re considering bankruptcy, it’s a good idea to talk to a nonprofit credit counselor and look at all your debt relief options to make sure it’s the right move.
Avoiding scams targeting senior citizens
Financial scams can hit anyone, although some are especially targeted at seniors. Many try to get your personal information to commit credit fraud (opening accounts in your name or stealing your own funds). Some to watch out for include:
- Social Security Administration (SSA) Impostor scams: You may receive a phone call saying your Social Security number has been “suspended.” It may even look like they’re using the SSA’s caller ID, but it’s really a ploy to get your information for credit fraud. Keep in mind that the SSA will typically mail you a letter — not phone you — if they need to get in contact.
- IRS scams: You may be contacted by someone who claims that you owe taxes, or else that you are owed a tax refund. Either way, if you get a phone call like this but haven’t received any notification in the mail, it’s probably a scam. If you’re unsure, call IRS customer service on your own at 1-800-829-1040 to verify the information.
- Lottery scams: With this scam, you get a phone call from someone claiming to be a lottery official, customs official or lawyer with the news that you’ve won money. The catch is that you need to pay fees for shipping or customs to get the funds.
Avoid giving out any personal information over the phone or in response to an email you didn’t expect. You can always check with government agencies or banks by calling them on their public phone line to see if the previous call was legitimate. And if you do suspect fraud, you can report it via a simple form on the Federal Trade Commission website.
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