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Older consumers have particular need for debt relief

Debt is generally a normal part of the life. The majority of New York residents likely carry some form of debt, although the overall levels of debt may vary from household to household. Unfortunately, debt can easily grow and become unmanageable, especially when consumers experience unforeseen circumstances or emergencies. When people begin to struggle under crushing levels of debt, many of them seek some type of workout or other debt relief solution to ease the financial strain.

A recent news story reported that older Americans (those over the age of 62) indicate that problems and harassment related to debt collectors constitute one of the main types of complaints these consumers make to the federal Consumer Protection Financial Bureau. Statistics showed that over one-third of the complaints to the Bureau related to debt collector harassment or other inappropriate actions, such as threatening to garnish wages or refusing to provide information about the debts. The number of complaints related to this problem is concerning because the Federal Reserve found that the majority of Americans aged 55 and above carry debt, despite the fact that many of those people live on fixed incomes and are still attempting to recover from the recession.

Although bankruptcy can be a helpful solution for dealing with large amounts of debt in many cases, it may not be such a good option in other cases. Some people may not qualify for bankruptcy, for example or may have transactions that occurred in their recent past that could complicate bankruptcy proceedings. For those for whom bankruptcy is neither viable nor recommended, there are other options to consider.

Consumers may have difficulty obtaining debt workouts on their own due to their own lack of knowledge or inexperience or creditors' resistance. Having an attorney defend the consumer's interests and present the case can sometimes be more effective. Debt relief options can include negotiating a mortgage modification for those who have fallen behind on their payments or who can no longer cover the mortgage payment that was previously agreed upon. In some cases, depending on a home's value, a consumer may even be able to eliminate second or third mortgages. Credit card debt and other unsecured debt often pose particular problems due to high interest rates, but it is possible to settle these debts for less than the amount owed in some cases.

Source: Forbes, "Debt Collectors: Top Complaint of Older Consumers," Liza Kaufman Hogan, Nov. 14, 2014

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