Tips for Older Americans in Debt

According to a 2016 report from the Federal Reserve Bank of New York, debt for Americans ages 50 to 80 has increased by 59% since 2003. The report did not find a similar increase in debt for younger individuals. 

Increasing amounts of debt for older Americans can make it more difficult to make payments on time, especially after retirement. When a lapse in payment occurs, these accounts are often sent to collections and the borrower starts to receive contact from debt collectors. 

If you or someone you know is receiving contact from a debt collector, take the following steps.

Ask the Collector to Validate the Debt

If you don’t recognize the debt or it seems inaccurate, ask the collector to provide you with a validation of the debt. You can use this letter as a sample. Past due accounts are often sold to debt buyers who then begin the collections process. A validation will provide you with the information of the creditor and where the debt originated. It should also show a detailed itemization of how the balance was calculated (principal, interest, late fees, etc.). 

Dispute Inaccurate Information 

If you want to dispute the debt, you have 30 days after the debt collector’s initial contact to do so. Write a letter and provide any documentation that you have that helps to support your dispute. Send this letter via certified mail with a return receipt so that you can obtain proof that your letter was received. 

Stop Harassing Calls

Under the Fair Debt Collection Practices Act (FDCPA), debt collectors can’t threaten, harass, or abuse you to try and persuade you to make a payment. They also can’t give you false or misleading information about your debt or place personal information on, or visible through, an envelope. 

If a debt collector is harassing you, you can send a cease and desist letter to get the contact to stop. The collector will have to stop contacting you, but this does not make the debt go away. The collection will likely be assigned to a new agency or law firm. 

Be sure to keep a contact log and make a note of each time the collector contacts you. Contact a consumer protection lawyer to discuss your situation and see if you can pursue a case against the collector for violating the FDCPA. If you hire an attorney, all contact made by the debt collector should be addressed to your attorney. Use this letter to inform the collector to contact your attorney.

Know Your Rights

Debt collectors can’t take your Social Security or VA benefits directly out of your bank account. If a debt collector sues you for a debt and gets a court order for wage garnishment, certain federal benefits are protected and cannot be garnished.

Manage Your Finances

Avoid additional debt by only spending within your means. Make sure to make all payments in full and on time, and avoid taking out any new lines of credit until your debt feels more manageable.