No special protections are afforded to the elderly when it comes to collection of an overdue debt. However, it may be harder for creditors to enforce a judgement to collect that debt. This is because most older people have sources of income that are protected by law. These sources of exempted income give the elderly leverage when asking for a debt settlement.
Seniors Typically Do Not Earn Wages
Retired people tend to earn very little in the form of traditional wages. Most of the money they have in the bank comes from social security or a pension. Creditors are prohibited by law from taking any social security benefits. Pensions are another source of income that typically cannot be taken by creditors. These exemptions are meant to allow the elderly to maintain a steady source of income during retirement. People who receive disability benefits will also be afforded many protections under the law.
Bank Accounts May Be Off-Limits To Creditors
Creditors may also attempt to take money from a bank account. Getting money in this manner could prove to be challenging as well. This is because most of the money is still going to be from social security or a pension. Creditors have to be very careful in how they proceed when attempting to seize these types of retirement funds from a bank account.
Creditors Could Place A Lien On Any Property Owned By The Debtor
The only action a creditor may be able to take is placing a lien on any property owned by the debtor. This could be problematic if the debtor does not own a home. An elderly individual may very well live with another family member. Older people may also be living in a nursing home. A debtor who does not own a home will not stand to lose much from a lien.
Accepting A Settlement Is The Only Logical Solution To The Problem
Accepting a debt settlement could be the only way a creditor sees any money. Getting back some of the loan balance is always going to be better than getting nothing. An older borrower may also have already transferred power of attorney to a child or other relative. Creditors may no longer contact anyone who has given power of attorney to another party. Allowing the debtor to negotiate through a debt relief program may be the best way to settle the issue. Creditors may get more money when they are willing to compromise a bit.
Seniors have a lot of leverage when it comes to negotiating a debt settlement. Income is harder to garnish when it is mostly social security benefits. Taking money out of a bank account is useless when that money is still protected by law. Placing a lien on a house is not going to be much of a threat for someone who doesn’t own a home. The only logical thing for creditors to do is to accept a debt settlement in an effort to get as much money as possible.
Author’s Bio: Valerie Anne B. Reyes is an in-house writer from Franklin Debt Relief, a company specializing in programs for people with high credit card debt.
PLEASE NOTE: Nothing in this post shall be construed as an offering of legal advice. These posts are meant for informative and educational purposes only. Please call our office to discuss any legal issues you may be facing.