Age UK, the national charity for elderly people in Britain has recently stated that over 1 in 50 people in their 70’s has a problem with debt.
A lot of focus within the debt advice industry is around debt attached to people of a working age or certainly people under retirement age, there has never been much analysis of how people can deal with debt in their later years, perhaps when retired and with little chance of earning potential.
It is certainly a fallacy to simply state that when a person dies their debts die with them. When a person passes away it is the responsibility of the estate to pay any debts. If there is no estate, or the estate isn’t sufficient to cover all liabilities then it is true that debts are written off and creditors are unable to chase surviving family members and in that scenario the debt would die with the person who has passed away.
However, take the example of an elderly couple, and one of them passing away. If they have any unsecured debt, say a bank loan or overdraft and that debt is in joint names then the surviving partner will become liable to pay the debt in full, regardless of whether there are any assets in the estate of the dying person. This means that if one of the couple stops paying the debt, because of financial difficulties or death, the other named party would have to pay the balance.
It goes without saying that if someone is struggling to maintain debt payments, elderly or not, they should seek free debt advice as soon as possible. However, this may be easier said than done as statistics suggest people at any age are hesitant to find help.
Regardless of age the same options still apply to anyone struggling with debt, they are still able to consider Bankruptcy, Individual Voluntary Arrangements (IVA’s) or even a Debt Management Plan (DMP).
I have found that many elderly people are not always aware of the support they have available to them. Many years ago I worked as a debt and benefits advisor at a local Citizen’s Advice Bureau (CAB). During my time there we instigated a campaign to review the benefits of every person over the age of 80 in the borough.
It transpired that over 50 per cent of the people we visited were eligible for the disability benefit Attendants Allowance. This made a real difference to their income as Attendance Allowance is not taxable and it also ‘triggers’ other benefits such as an increase in income support (as it was known at the time). It was not uncommon to see people’s monthly income double as a result of our visit and this was very rewarding. Income maximisation is the first tool a debt advisor should consider before other debt/insolvency options are considered.
If someone is in debt there will be an answer to their difficulties, the crucial thing is that the person in debt seeks free debt advice as soon as possible. If you’re struggling with debt please don’t hesitate to contact a member of our dedicated team on 0845 287 0939. Alternatively please complete the online enquiry form.