Debt Relief for Senior Citizens

For many, an ideal scenario would be to retire after a life’s worth of work with a large lump sum saved in a 401(k) retirement plan. While this may be the reality for some individuals, others, not so much. According to the 2016 Survey of Consumer Finances, the median net worth for individuals ages 65 through 74 decreased by 6%. Oftentimes senior citizens find themselves struggling financially, and the number of seniors retiring with debt continues to increase.

Unsurprisingly medical debt tends to be a big factor impacting seniors, but credit card and housing debt can also be contributors to financial expenditures and debt. According to the National City Council on Aging (NCOA), “In 2001, only 24.2% of senior households held credit card balances; by 2016, more than 34.2% did.” With debt levels on the rise, it can be stressful to find ways to pay it off. Luckily there are many resources for seniors, such as debt reduction services, food programs, and employment resources that are readily available to help senior citizens during their times of financial need.

Debt Reduction Options

For many people, accumulating debt may be unavoidable and having to pay it all back can be overwhelming. Debt reduction services, such as the ones listed below, are available to help senior citizens and others who find themselves struggling to get out of a financial hole.

Bankruptcy

Bankruptcy can be an option for people who have unmanageable debt that they aren’t able to pay off based on the current terms. Depending on their financial situation, filing for bankruptcy may be in a debtor’s foreseeable future.

But how do you know whether you should file for bankruptcy? You must first establish which type of bankruptcy you would need to file for. There are three types: Chapter 7, Chapter 11, and Chapter 13.

Chapter 7 is for people/companies with negotiable debt such as medical bills or credit card debt. Chapter 11 is strictly for businesses. Chapter 13 is for those who currently have a source of income but wish to restructure their debt. Once the type of bankruptcy you should file for has been established, a plan is set in place to help pay off your debts.

It’s common to wonder whether you can repair your credit score after filing for bankruptcy. The simple answer is yes, you can repair it. However, it will be difficult and time consuming. Filing for bankruptcy can decrease your credit score by as much as 200 points. From there, it will require basic credit-building techniques to improve your score.

Credit Counseling

Credit counseling is available to those who are in need of financial advice. A debt-relief and financial counseling session can teach you the basics of money management (such as how to get a better understanding of your financial situation, how to use budgeting techniques, and ways to save money).

You may even be offered a credit repair guide tailored to your specific financial needs, and the counselor will discuss ways to become debt-free.

Debt Settlement

Creating and finalizing a debt settlement plan means to invest in a service that is offered by third-party companies to help consumers get out of overwhelming debt. Although they have their similarities, debt settlement differs from debt management.

Debt settlement involves working with a company that negotiates with creditors, whereas debt management is a plan set in place that allows you to make payments on the debt you owe.

Loan Consolidation

Loan consolidation is the process of combining all of your loans into one large loan. This way, you only have one loan payment to make instead of multiple. For seniors, common loans may include car payments, mortgages, and even personal loans. The best debt-consolidation methods include:

• Credit card refinancing;
• Credit card consolidation loans;
• Creating a debt management plan;
• Home equity loans;
• 401(k) loans;
• Using a debt consolidation calculator.

Part-Time Jobs

It may not be the most ideal solution, but applying for a post-retirement job can help with debt relief for senior citizens. However, there may be a sense of discouragement, and some may feel as if there aren’t jobs available to them. Don’t lose hope —  there are agencies available that specialize in helping senior citizens find employment.

For example, the AARP Foundation, the National Association of Area Agencies on Aging, and the Senior Community Service Employment Program help retired individuals find jobs that best accommodate their needs. Jobs that allow seniors and retirees to work from home include:

• Customer service;
• Virtual assistant;
• Online tutor;
• Writer.

Reverse Mortgage

A reverse mortgage allows individuals to receive a portion of their home equity paid back to them in the form of a loan. This could be helpful for people who have no other option, however, it is important to recognize the repercussions of a reverse mortgage.

One of the downsides of a reverse mortgage loan is that you are still responsible for paying any associated fees that come with owning a home. These fees include property taxes, utility costs, and homeowners insurance.

However, there are some advantages to taking out a reverse mortgage. Not only are you exempt from having to pay taxes on your loan, but you also don’t have to make monthly mortgage payments since your bank is paying you instead.

It is important to know that even if this option is right for you, there may be additional risks that come along with a reverse mortgage. Unfortunately, seniors often fall victim to scams. The popular reverse mortgage scam is no exception.

A reverse mortgage scam is when individuals pose as employees from your bank in an attempt to scam money from you. You can avoid this by being wary of the phone calls you receive, not falling for pushy sales representatives, ignoring misleading advertisements, and educating yourself on the different tones and scripts these scammers may be using to attack you.

Food Program Resources

Struggling financially goes beyond needing to find ways to reduce your debt. It can also mean feeling uncertain about where your next meal will come from. Luckily, there are many organizations designed to help those who are suffering from financial hardship, especially the elderly who need assistance with finding food.

Each of the organizations listed below offers a different type of service that can assist senior citizens in finding nutritious meals.

Child and Adult Care Food Program (CACFP)

The Child and Adult Care Food Program (CACFP) provides nutritious meals and snacks to over 130,000 eligible adults every day. To qualify for the adult portion of CACFP, you must be over 60 years of age, or living with a disability and enrolled in an adult daycare. You can contact adult daycares in your area to see if any of them offer CACFP services.

Commodity Supplemental Food Program (CSFP)

The Commodity Supplemental Food Program (CSFP) “works to improve the health of low-income persons at least 60 years of age by supplementing their diets with nutritious USDA foods.” Typically, the food packages contain a selection of fruits, juices, vegetables, milk, cheese, grains, and protein.

To be eligible for CSFP, applicants must be at least 60 years of age and live in one of the states or one of the Indian reservations that are a part of the CSFP program. Additionally, your income must be at or below 130% of the Federal Poverty Income Guidelines to qualify for the CSFP. To apply or verify if CSFP is offered in your area,  contact your local State Distributing Agency.

Feeding America

The Feeding America nationwide network of food banks “secures and distributes 4.3 billion meals each year through food pantries and meal programs throughout the United States and leads the nation to engage in the fight against hunger.” There are more than 200 food banks and 60,000 food pantries nationwide that serve individuals in need.

These non-profit organizations collect and distribute food to participating hunger-relief charities that then distribute it to the public. By gathering donatable food, safely storing it, and distributing the food via pantries and meal programs, Feeding America supports the public in demolishing hunger.

Meals on Wheels

Meals on Wheels is an on-the-go program that delivers nutritious meals to senior citizens throughout numerous cities in America. What some may not know is that Meals on Wheels is more than just a food delivery service — they also will stop by your home for a friendly visit and can conduct a safety check with every meal delivered.

The program is intended for adults 60 years of age and over, however, age requirements can vary based on each local Meals on Wheels program. Meals may be on a sliding fee scale or no cost at all. Contact your local provider to learn more about how to get started with Meals on Wheels in your area.

Supplemental Nutrition Assistance Program (SNAP)

SNAP is a program that “provides nutrition benefits to supplement the food budget of needy families so they can purchase healthy food and move towards self-sufficiency.” While there are standard eligibility requirements for SNAP, there are special rules for households with elderly or disabled members.

For instance, applicants must be at least 60 years of age and meet the net income test. Net income requirements are updated annually. To find out about current net income eligibility requirements or apply for the program, contact your local state SNAP office.

Income and Employment Resources

In order to supplement their income, some senior citizens may find themselves getting a part-time job to help add to their life savings, or even coming out of retirement due to lack of funds. While this may not be the most ideal situation, there are various resources and organizations designed to provide seniors with supplementary income and employment options.

Senior Community Service Employment Program (SCSEP)

Senior Community Service Employment Program (SCSEP) “helps low-income unemployed individuals aged 55+ find work.” In order to qualify for the program, individuals must be at least 55 years of age, unemployed, and living on a family income of no more than 125% of the federal poverty level.

To apply for SCSEP services, applicants will need to contact their local SCSEP office. Once enrolled for employment services, individuals will gain experience as a:

• Building maintenance employee;
• Child care provider;
• Computer technician;
• Customer service representative;
• Healthcare worker;
• Teachers’ aide.

Participants will train for 20 hours a week, on average, and will either earn the federal, state, or local minimum wage (whichever is highest).

Supplemental Security Income (SSI)

The Supplemental Security Income (SSI) program “pays benefits to disabled adults and children who have limited income and resources.” Contact your local SSI office to see if you are eligible for benefits. To apply for SSI online, applicants must meet the following requirements:

• Are applying for Social Security Disability Insurance at the same time as your SSI claim;
• Are between the ages of 18 and 65;
• Have never been married;
• Haven’t applied for/received SSI benefits in the past;
• You are a U.S. citizen residing in the 50 U.S. states, District of Columbia, or the Northern Mariana Islands.

Tax Credit for the Elderly or the Disabled

A tax credit is a tax incentive that allows eligible taxpayers to deduct the amount of credit they have accrued from the total amount they owe the state. The taxpaying elderly who are 65 years of age or older or those who are retired due to a disability are eligible for this federal tax credit. Once an individual has determined whether they qualify for the tax credit, they must then fill out Form 1040-SR.

Medical Resources

Healthcare, medical expenses, and other health issues that are beyond your control can add up fast. Healthcare often becomes an urgent need, especially since having access to viable medical resources becomes even more important as you get older.

The overabundance of medical expenses can quickly become overwhelming and you may not have the finances to cover all of the costs. There are medical resources available to those who qualify to help them with their healthcare needs.

EyeCare America

EyeCare America provides free or low-cost medical eye exams and discounted medications to senior citizens. There are two main EyeCare America programs, the Seniors Program and the Glaucoma Program. To be eligible for the Seniors Program, you must meet the following qualifications:

• Age: 65 or older;
• Healthcare status: You can’t belong to an HMO or have eye care benefits through the VA;
• Medical history: You must not have seen an ophthalmologist in three or more years;
• Citizenship: You must be a U.S. citizen or legal resident.

When you’re inquiring about EyeCare America, it is important to note the services that are not covered by their program. These uncovered services include hospital, surgical facilities, anesthesiologists, and medication costs. Eyeglasses are also not covered by EyeCare America.

Dental Lifeline Network

Dental Lifeline Network is a nonprofit organization that provides access to dental care and education for individuals who are unable to afford it themselves or:

• Are age 65 or older;
• Are medically fragile;
• Have a permanent disability.

Specific programs vary by state, so you’ll want to research to find out which one is available to you and to apply.

Health Center Program

The Health Center Program was created to “deliver high quality, culturally competent, comprehensive primary care, as well as supportive services such as health education, translation, and transportation that promote access to health care.”

Most of the healthcare centers involved in the program receive federal grant funding. Some of the health centers receive funding to focus on special populations, including “individuals and families experiencing homelessness, migratory and seasonal agricultural workers, and residents of public housing.” All Health Center Programs have access to:

• Federally qualified health center prospective payment system reimbursement for services to Medicare and Medicaid beneficiaries;
• 340B Drug Pricing Program discounts for pharmaceutical products;
• Free vaccines for uninsured and underinsured children through the Vaccines for Children Program;
• Assistance in the recruitment and retention of primary care providers through the National Health Service Corps.

Medicaid

Medicaid is a type of health coverage that is provided to millions of low-income adults, children, pregnant women, elderly adults, and people with disabilities. There are multiple factors that go into determining your eligibility. For example, prospective Medicaid applicants must meet one of the following eligibility requirements:

• 65 years of age or older;
• Blind;
• Child or parent of a child;
• Pregnant;
• U.S. citizen or meet the immigration requirements;
• Resident of the state in which you apply;
• Have a Social Security number.

Some of the benefits of Medicaid include, but certainly aren’t limited to:

• Behavioral health services;
• Dental care;
• Hospice benefits;
• Prevention;
• Telemedicine.

Medicare

Medicare is a type of health insurance created for individuals who are 65 years of age or older, people under 65 with certain disabilities, or people of any age with end-stage renal disease (ERSD). There are four different parts to Medicare: A, B, C, and D. Parts A and B are the most common.

Part A covers:

• Home health care;
• Hospice care;
• Inpatient care in hospitals;
• Skilled nursing facility care.

Part B covers:

• Durable medical equipment (DME);
• Home health care;
• Preventive services (like screenings, shots or vaccines, and yearly wellness visits)
• Outpatient care;
• Services from doctors and other health care providers.

You can apply online, however, you may automatically receive Medicare benefits through your employer. So it is important to talk to your employer prior to applying to ensure you don’t have any miscommunication on your benefits.

Housing and Utility Resources

Part of owning/renting a home is paying for the various housing and utility costs. As time goes on, you may incur more housing expenses. This can be particularly overwhelming, especially if you are in a low-income household and have exhausted your home equity line of credit (HELOC) loan.

The following organizations are available for individuals who find themselves needing assistance with paying basic household and utility expenses.

Low-Income Home Energy Assistance Program (LIHEAP)

The LIHEAP or Low-Income Home Energy Assistance Program helps low-income families and adults with energy costs. According to their about page, LIHEAP “[provides] federally funded assistance in managing costs associated with:

• Home energy bills;
• Energy crises;
• Weatherization and energy-related minor home repairs.”

Some states have the LIHEAP application online. But if you live in a state without an online application, you’ll need to contact the LIHEAP office at 202-401-9351.

National Association for State Community Service Programs (NASCSP)

The National Association for State Community Service Programs (NASCSP) is committed to “the empowerment of individuals and families with low-incomes.” The services they offer — via programs such as the Community Services Block Grant (CSBG) and Weatherization Association Program (WAP), include:

• Asset development;
• Child care;
• Employment;
• Energy assistance;
• Housing in urban, suburban, and rural communities;
• Job training;
• Nutrition;
• State energy programs;
• Weatherization.

To find out about the specific programs in your area, you will want to contact your local NASCSP office or CSBG/WAP members for more information.

Single-Family Housing Repair Loans & Grants

The Single-Family Housing Repair Loans & Grants, is also called the Section 504 Home Repair program. According to the program’s website, it “provides loans to very-low-income homeowners to repair, improve or modernize their homes or grants to elderly very-low-income homeowners to remove health and safety hazards.” To be eligible for this program, and you must:

• Own and live in your home;
• Be unable to obtain affordable credit elsewhere;
• Have a family income below 50 percent of the area median income;
• For grants, be age 62 or older and not be able to repay a repair loan.

Enter your address to further determine your eligibility and apply for the program. If you’re approved, you can get a loan up to $20,000, a grant up to $7,500, or a combination of the two for a maximum of $27,500. Each loan term will vary.

U.S. Department of Housing and Urban Development (HUD)

The U.S. Department of Housing and Urban Development (HUD) “oversees the Federal Housing Administration (FHA), the largest mortgage insurer in the world” HUD underwrites Housing for the Elderly via Section 202 and Housing for Persons with Disabilities via Section 811. These programs provide affordable housing for some of the nation’s most vulnerable populations.

To be eligible for HUD housing, you must be at least 62 years old and have a low income. To find out more, visit the HUD apartment locator and contact your HUD housing provider of choice to verify if they are a Section 202 or 811 participant.

Weatherization Assistance Program

The Weatherization Assistance Program “reduces energy costs for low-income households by increasing the energy efficiency of their homes, while ensuring their health and safety.”

To qualify for weatherization services, your household’s income must be below 200% of the federal poverty guidelines, or you must be receiving Supplemental Security Income or Aid to Families with Dependent Children.

However, some states offer different weatherization assistance so it is important to contact your local state weatherization agency to find out more about how to apply, whether you qualify, and what you are eligible for.

Emergency Financial Assistance Resources

There are different programs and laws that are set in place and designed to protect the elderly, more specifically, ones that aid with various financial emergencies.

Department of Justice – Elder Justice Initiative (EJI)

The Department of Justice’s Elder Justice Initiative (EJI) combats “elder abuse, neglect and financial fraud and scams that target our nation’s seniors.” Elder abuse happens when an individual intentionally causes harm or a neglectful act (including financial fraud and scams) to an older adult.

If you or someone you know is experiencing elder abuse, there are multiple stages to reporting it. First, the EJI must investigate the incident. Up next comes prosecution of the perpetrator. Then finally the process ends with victim recovery. It is important to report financial exploitation as soon as you think you or someone you know has suffered from it. The sooner the abuse is reported, the sooner the recovery process can begin.

National Association of Area Agencies on Aging (n4a)

The main mission of the National Association of Area Agencies on Aging (n4a) is to “build the capacity of our members so they can help older adults and people with disabilities live with dignity and choices in their homes and communities for as long as possible.” This association provides many aging services which include:

• Aging and disability resources;
• Caregivers;
• Care transitions;
• Elder justice;
• Health insurance assistance;
• Healthy aging;
• Home and community-based services;
• Liveable communities;
• Older Americans Act;
• Transportation.

N4a is membership based, so if these services are ones that you may be interested in, you will need to visit the n4a membership page to sign up.