Over Four out of Ten Colorado Seniors Classified as Economically Vulnerable
~ By Eric Olsen ~
A study by the Economic Policy Institute, a Washington D.C. think tank, finds that nearly half of persons over 65 in the United States are “economically vulnerable” with income within 200% of the federal poverty level. The Kaiser Foundation finds that 42% of Colorado seniors over 65 have incomes less than 200% of the federal poverty level under supplemental poverty measures. Moreover the Federal Consumer Financial Protection Bureau recently reported that debt collection was the top complaint for older Americans. “It is increasingly common for older Americans to carry debts into their retirement years, and consumers living on fixed incomes often struggle to pay off these debts,” said CFPB Director Richard Cordray.
Low income and old debt is a problem for many seniors. What many seniors don’t realize is that their social security, pensions, personal retirement, disability, and VA benefit are protected from collection under federal laws. Congress passed these laws in order to protect vulnerable seniors with limited incomes. This income does not need to be used to pay old debt. This knowledge is especially important for lower income seniors with old debt they can’t afford to pay. So what happens when a senior doesn’t pay old debt? Collectors will call and send demand letters. They will never tell a senior that their income is protected. Collection attempts are often frightening and sometimes abusive.
Seniors have several options. They can simply ignore the communication. A bankruptcy can be an intimidating, expensive and unnecessary option for a senior whose income is protected anyway. Then how can unwanted collector contact be stopped? Under the Federal Fair Debt Collection Practices Act, a consumer has the right to request, in writing (that’s key), that a third party collection agency cease and desist further contact regarding an alleged debt. This is called a cease and desist letter. This includes stopping contact both by phone and mail from a collector. This regulation does not apply to an original creditor. However, it is the collection agencies that are generally the more aggressive. A copy of a “cease and desist letter” can be found easily on the internet. HELPS, non profit law firm has a copy available for download on its website at www.helpsishere.org.
Sometimes economically vulnerable seniors sadly go without basics like food and medicine to pay old debt they simply can’t afford to pay. Armed with the knowledge that their income is safe, the means to stop collector harassment, they can choose to disregard their old debt. They can then use their social security, retirement and other protected income for their needs.
Eric Olsen is the Executive Director of HELPS nonprofit law firm. www.helpsishere.org