Debt and the Elderly

Elders in Debt


I have seen a number of elders lately who are attempting to make payments on large credit card debt from very meager cash flow, usually just Social Security.

These clients want desperately to pay their debts, when in my professional opinion, it is neither possible to pay them off, nor wise to make the sacrifices to do so.


I fear that too many of our elderly are enduring continuing stress and scrimping on food, medical treatment, and emergency cash reserves in an attempt to honor their values about repaying their debts.

In the case of credit cards and credit card interest rates, paying off this debt on retirement income is simply not feasible.


Fear drives some of the elderly to keep paying.  They don’t understand the protections from debt collectors built into our laws.  They are often subject to collector intimidation.  That intimidation thrives on their unfamiliarity with the law.

Nonetheless, the worry and stress that debt accumulation causes is unhealthy.  The  retired need to know that Social Security payments may not be intercepted or levied to pay typical debts.

Debt ridden elders frequently are judgment proof:  everything they have is protected by an exemption such that even a creditor with a judgment can’t take anything from them.

California retirees have further protection:  retirement benefits and pension payments are likewise protected by state law, without resorting to bankruptcy.

I urge family and other care givers and professionals supporting the elderly to be alert for evidence of unmanageable consumer debt.

Elders are perhaps the one group who benefited by the recent changes in bankruptcy law.  While bankruptcy has the advantage of certainty in getting rid of debt, there are other alernatives that may not be so neat, but are largely effective in getting peace from debt for our seniors.

Links to more on the elderly and their money

Social security and debt collection

When insurance is essential

At Issue interview with Cathy Moran on debt and elderly

About the Author
Northern California bankruptcy lawyer Cathy is a 30+ year veteran of bankruptcy practice in the Silicon Valley. She is known for energetic representation of clients and her command of bankruptcy law.