Dean Burgess from Excitepreneur.net | firstname.lastname@example.org has offered to write for us and maybe this is a sign that I’ve been being too positive – a first for me – but there are undoubtedly downsides of life in retirement and for some t isn’t all about TOYL, the Time Of Your Life but yet more TOIL! If financial planning hasn’t provided you with the life you had hoped for there may be ways you can settle debts and make life a little easier. Previous blogs have suggested some ways but here Dean highlights some alternatives.
Financial stress can affect people of any age, but when seniors experience it, the stakes seem even higher. With a limited, fixed income and barriers to accessing additional finances through work, seniors may feel as though they are destined for disaster.
What is Bankruptcy?
Bankruptcy is a legal way to discharge debt that allows companies to receive funds from available assets. Filing bankruptcy creates an automatic stay, preventing debt collectors from taking further action against you and putting a stop to calls and letters. The process of bankruptcy is a lot of legwork, as you need to supply a comprehensive list of debts, assets, property, and income as part of the judgment in your case. Bankruptcy negatively impacts your credit score, and it will take many years to rebuild it, but in certain circumstances, the decision to file is well worth the reduction of stress.
There are a lot of misconceptions about bankruptcy. A common myth about filing bankruptcy is that you will lose your home or car as a result. When you use a reputable, experienced attorney, you are protected from these outcomes. Your Social Security is automatically protected during bankruptcy through the rule of law. It is important to use a trustworthy resource to assist in filing if you do use this option. Prior to making a decision to file bankruptcy, a consultation is recommended, as well as exploring additional options for debt reduction.
Exploring Debt Management Options
Many seniors opt to use debt management or debt settlement companies to deal with financial stressors. However, be sure to research the pros and cons of these choices, such as the impact on your credit score and additional fees for the services rendered. There are many scams that target seniors, so try to stay ahead of the frauds by investigating the history and reputation of any company you consider.
Debt consolidation is another method to think about. This option merges all your outstanding debt into one payment, which is great for simplicity purposes. Debt consolidation is not for everyone, though, and largely depends on the amount you owe. If your debt is greater than forty percent of your income (excluding mortgage payment), this may not be the best idea for you. Keep in mind that this can be a risky option and there is a possibility of losing your home if your debt ratio is significant enough.
If you have an existing mortgage, it may be useful to explore refinancing to reduce your mortgage payment and secure a lower interest rate. Making these adjustments within your mortgage can also change the number of years on your account. Choosing to refinance is better for people who plan to remain in their home long-term, so consider your future plans as you make the decision.
Simple Ways to Increase Cash Flow
Seniors who are looking for ways to put more money back into their pockets may benefit from thoroughly inspecting their outgoing expenses. Check your bank statements carefully to make sure you are not being charged for something erroneously. Sometimes, even after a service is complete or a purchase is finalized, payment may continue to come out of your account due to an oversight by the vendor or institution.
Additional ways to save include eliminating duplicate charges or unnecessary bills. Sometimes, upon closer inspection, seniors discover that they are over-insured or paying out hard-earned money unnecessarily. Explore tax deductions that may help your financial situation, and consider ways to cut costs in daily life. It may be worth it to look for assistance resources; you may find that there are options you were not aware of that could help stabilize your finances.