Yahoo Finance I’m 97 years old, living in Medicaid-funded housing and in credit card debt, facing eviction — what can I do?
Imagine being in your 90s and facing eviction with no family or close friends to lean on for support. While this may be an upsetting vision of the future, it’s a reality some Americans face.
Bearing the weight of tens of thousands of dollars of credit card debt spread across several different accounts is never good, particularly if you’re surviving on Medicaid and payments are automatically being deducted from your bank account by creditors.
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Such a scenario can leave you in arrears with your monthly housing payments — or worse — have you facing eviction if the pattern continues for long enough.
Fortunately, you may have some recourse if you ever find yourself in this financial position. Becoming more familiar with your Social Security rights can help when figuring out your best course of action.
Cutting creditors off from your Social Security funds
One approach to this financial conundrum is to raise a case against the automatic access creditors have to your Social Security benefit funds. While it's typically always a bad idea to default on credit card debt, the risks and benefits of doing so look a little different when you're well past retirement and broke. The reality is, creditors have no real options when it comes to collecting in this situation.
While you’re receiving Social Security benefits, creditors can't take that money even if they go to court and get a judgment against you. Social Security can only be garnished or levied for limited reasons, such as unpaid child support or alimony, court-ordered restitution, or federal tax and non-tax debt. Credit card companies don't get the right to take your government benefits.
If you had substantial assets that credit card companies could put a lien on, or other sources of income that could be garnished, they might be able to take possession of your assets until your debt is paid. But those without assets tend to fall under the "judgment proof" category, which means even if creditors sued and the court found against you, they couldn't collect.
In this case, the only recourse creditors may have left would be ruining your credit history with reports of late payments and defaults and making collections calls. Keep in mind, you can always request they stop contacting you by sending a letter they'd be required to comply with.
Despite it potentially feeling like a moral failing not to pay back what you owe, the reality is that ending up houseless in your late senior years can be a risk to your safety and creditors can bear the financial loss far better than you.
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There are options for struggling seniors
You wouldn’t be alone in facing financial problems as a retiree, as many seniors find themselves with too little income and too much debt.
For those who are struggling, there are options. Speaking with a reputable credit counselor can help you make a proactive plan to deal with debt that may be causing your fixed income to disappear as a retiree.
Exploring government benefits is also a good idea. Supplemental Security Income (SSI) can provide additional income to seniors with limited assets and financial resources, and Medicaid should cover the costs of nursing home care in eligible facilities for seniors with limited funds.
When in doubt, taking a broader look at government benefits is a good way to learn about the financial aid that's available to seniors — especially if their home is at risk.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
