Most of you know I am an elder abuse lawyer. But not all of you can grasp that I have parents too. Yes, even us land-sharks care about our folks and I want you to check this info out to see how older adults can manage their debts and get financial freedom. Enjoy.
The elders are squeezed by the rising prices as the magnitude of crisis continues to unfold. The consumer debt is spiraling out of control and ruining your financial situation. These citizens can enroll in a debt relief program to eliminate their financial woes. Here are a few debt management strategies that the senior citizens can employ to manage their finances effectively.
1. Tapping home equity:
It is advisable to tap the home equity in your house if you are knee deep in high interest debts. Remember that reverse mortgage can be beneficial as you can convert your home equity into cash that you will receive each month. You will get this amount in a lump-sum payment or as a credit line that can be used for other purpose. The money you get from reverse mortgage is not required to pay back as along as you live in the house. This is considered to be a source of income for many financially crippled seniors.
The value of the house and age of the elder adult will determine the loan amount you shall receive. If your age is above 62 years then you can qualify for this type of transaction only if you have not default on your mortgage payment. The senior citizens can use the money to pay off this existing debt and lead a debt free life. But the children of the deceased parents need to pay the owed amount to lenders if they want to regain control over the property.
2. Use insurance policy with cash value:
If you have life insurance policy with cash value then you can take out a cash-surrender loan. The seniors can breathe a sigh of relief as they are not required to pay back this loan amount. If the older citizens cancel the policy then the policy holder will be paid a stipulated sum of money as their cash value. Remember that you can also borrow against your life insurance policy and it can build up more cash value as the policy gets old. If you are opting for cash surrender loan then you cannot take out more than 96% of the policy. After the death of the policy holder the insurance company will recover the loan balance as well as the interest.
Therefore, if you are crushed under debt then it is advisable to tap your policies to regain control over your finances.
3. Pay off bills with emergency fund:
You are advisable to pay off the bills by using your savings that you might have hoarded to secure your financial future. It will be beneficial to withdraw money from the accounts where you get 4% interest annually to pay off your 20% interest debts. Therefore, you can use your emergency fund during your financial crisis. I hope you enjoyed these great ideas and concepts.