Elder Americans’ Debt Growing Fastest

Are Grandma and Grandpa over-spending through credit cards?  Companies that track consumer debt say yes.

According to last weekend’s WSJ article quoted in our last blog, Coping with Debts of the Dead, America’s Elderly are incurring unsecured credit card debt faster than other age groups.

“Debt among Americans between the ages of 65 and 74 is growing faster than for any other age group, according to the Federal Reserve.  As of 2007, the latest year for which figures were available, the median debt level of that age group was $40,130, up from $27,458 in 2004….  Strategic Business Insights’ Macromonitor conducted a separate survey and found that households headed by Americans 75 and older carried an average of $7,200 in credit-card debt in 2010, more than triple the 2008 level.”

Typically, “when a person dies with credit card debt, their estate is typically responsible for paying off the debt. This is because the deceased’s assets and personal property pass to their estate when they pass away. The estate will then pay off any outstanding debts, including credit card balances, in a specific order of priority. Credit card debts are usually at the bottom of the list, and if the estate doesn’t have enough money to cover them, the debt is usually written off.”

HOWEVER, that means their house(s), car(s), and other possessions could go away since they did have possessions to sell and pay off their credit card debt.  What you thought you would be inheriting might be lost.

If there’s a concern regarding a family member’s debt(s), this would be a good time to take action – starting with a consultation with us so you can get experienced guidance regarding liabilities and next steps.