3 debt relief questions seniors should ask themselves right now

Stock market uncertainty and wider economic volatility are a serious concern for all Americans right now, particularly after the battle against inflation and higher interest rates millions endured in recent years. But this concern is likely more prevalent for select demographic groups, seniors of which are near the top of the list. For older Americans reliant upon retirement savings, Social Security and other limited resources, the ability to withstand additional economic swings is limited. And it's even more restrictive if these seniors are already coping with high-interest debt, whether that be on credit cards, personal loans or other items.

Fortunately, there are multiple debt relief options available. Ranging from items such as credit card debt forgiveness (also known as debt settlement) to debt consolidation loans, debt management programs and more, there's likely an appropriate option for seniors to explore right now. But these debt relief solutions aren't free and some may even come at the expense of a damaged credit score. So they should be reviewed carefully and with objectivity, even in today's uncertain economic climate. For seniors and older adults, that review begins with having the answers to the three debt relief questions outlined below.

Start by checking your credit card debt forgiveness eligibility here.

3 debt relief questions seniors should ask themselves right now

Before proceeding with a debt relief solution, seniors stuck in debt in today's economy should first consider the realistic answers to these three questions:

Can my current budget pay off what I owe?

For some seniors, clever budgeting moves or a simple reduction in cost-of-living expenses could be the difference between paying off what they owe versus adding to it. For others, however, their budget doesn't have any additional flexibility, at least not to the point of being able to pay off what they owe in a timely manner, before compound interest causes their debt load to increase exponentially. 

So it's first important to determine which category you fall into. It may be valuable to sit down with a pen, paper and calculator to determine where your existing budget may have room to pay off what you owe. But be realistic about your current circumstances and what you can reasonably cut or reduce. If there's little to work with, debt relief options may be worth exploring instead.

See what debt relief options are available to you now.

What are my current interest rates?

Your current interest rates on your debt will go a long way toward determining your ability to make repayments effectively. Credit card interest rates, for example, are hovering around 23% now, making them unaffordable for a wide range of borrowers. Making minimum payments at that rate is unlikely to reduce your debt in any meaningful way anytime soon. The average personal loan interest rate, meanwhile, is around 12% now. 

Still, these are today's averages, and the rates on your credit products may be higher or lower. Check your statements, then, to determine what rates you're currently paying and consider using an online payoff calculator to obtain an approximate timeline. With exorbitant interest rates and ongoing compound interest to cope with, many may find their debt situation too difficult to sort through on their own, necessitating the help of a credit counselor or other debt relief service right now.

How urgent are my debt relief needs?

If you've determined that your budget can't make a significant improvement in your debt situation – and have realized that higher interest rates on your debt are only worsening your situation – then you may be ready to move on to an appropriate debt relief solution. But you shouldn't just pick any option (nor will you necessarily be eligible for any simple debt relief service). 

To better narrow down your options, you'll need to understand the urgency behind your debt relief needs, as different debt relief options have different timelines than others. Credit card debt forgiveness, for example, can take a few years to reduce what you owe. A debt consolidation loan from a debt relief company, however, can dramatically reduce your interest rates and wind up reducing your principal in just a few months. So consider the urgency of your debt relief needs and your timeline for paying off the debt to better determine the next steps.

The bottom line

Debt relief, in its myriad forms, could be what seniors need to explore in today's volatile and hard-to-predict economy. Or it may not be appropriate. There is no one-size-fits-all answer that would apply to every senior. Instead, consider taking a strategic and nuanced approach to your debt issues, starting by compiling realistic and fair answers to the above three questions. By doing so, you can better determine which debt relief approach makes sense for you now and, just as importantly, start the delayed work of regaining your financial independence.