How can you consolidate and pay off debts after retirement? - By: JasonHolmes

Problem:
I am 70, a widowed senior citizen. I owe a lot on my credit cards and department store card bills. My outstanding debt amount is close to $42,000. I hope to get an income tax refund so that I can reduce my debt. The interest rate on one of my cards is 30%. I have searched for suitable online money making options and selected one with the help which I’ve started earning, though it’s not much. I always try to make minimum payments on my bills; however, the debt doesn’t seem to go down. I know that I have accumulated a lot of debt since my retirement. Though I’ve approached a debt settlement company, yet I’m not sure as to whether or not I should actually get help from such a company. I don’t have any assets that I can use to pay off debts. Please help so that I don’t have to utilize my retirement cash to pay off debts.

Solution:
At first, I must tell you that you’ve made the right decision to utilize your leisure time so as to earn a monthly income. It would definitely help you pay off your debts. I would advice you that you also plan a suitable budget so that you can reduce your monthly expenses and save more. It would help you pay off your debts faster. If required, go for a credit counseling session or get help of a financial advisor. The counselor or the financial advisor may assess your financial situation and offer suitable tips to manage your personal finance in a better way.

As far as going for debt settlement is concerned, let me tell you that your creditors won’t accept an amount less than what is owed till you become delinquent on your accounts. Moreover, debt settlement would also affect your credit report negatively and reduce your score by several points.

As you’ve continued making minimum payment on your bills, I would suggest you to consolidate bills with the help of a consolidation company or do it on your own. If you go for professional help, you may enroll in a consolidation program. In such a program, a debt consultant, on behalf of the consolidation company, would assess your scenario and decide upon a monthly amount that you need to pay to the company. It would also negotiate with your creditors to reduce the interest rates on your bills so that you can pay off debts faster. When you make the monthly installments to the company, it would distribute the amount amongst your creditors on your behalf.

Instead of getting professional help, you may consolidate bills on your own. By doing so, you can save the amount that you may otherwise pay to the consolidation company. All you need to do is plan an effective budget and negotiate with your creditors on your own. You can also take out a consolidation loan to pay off your debts. What you need to do is, calculate your outstanding debt amount and take out a loan with which you can pay off your existing debts.

Whatever option you choose to consolidate bills, make sure you don’t incur further debts till you have repaid the existing ones. Otherwise, you’ll face problems to manage your debts and personal finance.

About the Author

You can take help of debt consolidation if you’re facing problems in managing multiple bills. To consolidate bills, you can get help from a consolidation company or negotiate with your creditors on your own. You can also take out a loan to pay off your existing debts. Whatever option you choose, you should plan a budget and try to save more so that you can become debt-free relatively faster.

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