5 Options To Help Seniors Pay Off Debt

Challenges Seniors Face

Managing debt payments and rising living expenses can be difficult if you’re retired and on a fixed income. That's why it’s essential for senior citizens to eliminate debt as soon as possible. 

Repaying debts can interfere with your retirement savings plan in the years leading up to your retirement. Each month, the payments you need to make on your debts take precedence over the monthly contributions you should be making to your 401(k) and/or IRA accounts.

Regardless of your situation, if you're over 60 years old, it's best to seek professional help to determine the right debt relief program to pay off your current debts. Although filing for bankruptcy is a way to eliminate most debt, there are other, less drastic options to consider before resorting to this method.

Senior Debt Statistics

More seniors are retiring with higher levels of debt than ever before. The average consumer debt balance carried by Baby Boomers was $92,619 in 2025. This includes personal loans and other unsecured debts, along with large, unforeseen expenses such as medical and home repair/maintenance.

Credit cards constitute a large source of debt for seniors, and record-high interest rates can make carrying a balance devastating for those on fixed incomes. In 2025, the average credit card balance for Baby Boomers was $6,795. 

Retirees usually rely on fixed incomes from Social Security and flat monthly pension payments, exacerbating the stress of debt repayment. They often find that, after paying for monthly living expenses, they may need more money at the end of the month to pay down high credit card balances.

Debt Relief Help for Seniors

Meeting the payments on high-balance, high-interest debts like the kind you’d find on most credit cards can make it harder for seniors to make ends meet. Fortunately, senior citizen debt relief programs can help alleviate debt.

Paying off debt before retirement has many advantages, including freeing up money to save for the future. Credit card relief for seniors can also ease financial strain, making it easier to cover essentials like medical bills, groceries, and assisted living—whether you're planning for retirement or already there.

Thankfully, seniors can access multiple debt relief options to avoid the hassle and credit-disrupting process of bankruptcy. 

5 Options for Seniors To Get Out of Debt

Help for seniors with credit card or other forms of debt is available in various forms, including debt relief programs and counseling, as well as government benefits. Explore the recommendations below to find an option that suits your financial situation.

1. Discuss Debt with an Expert

Seeking the help of a financial professional gives you direction and counsel as you begin the process of paying off debts. 

If you don’t know where to start with debt repayment, nonprofit credit counseling can be a great way to enlist the help of a professional. A credit counselor will review your credit report, debt, and budget to create a tailored repayment plan.

Credit counselors can also enroll your debts in a debt management program and negotiate lower interest rates with your lenders so you can pay off debts faster.

2. Make a Budget

Creating a budget is a great place to start when it comes to paying off debt. A detailed budget will allow you to see where you’re spending your money. This will highlight the source of the debt you’ve accumulated and show you where to reduce or even eliminate spending, especially for discretionary purchases.

Write down each debt with the outstanding balance you owe, the monthly installment, the interest rate, the payment due date, and the name of each creditor. This will give you an idea of your total debt, the most expensive debts, and whether they are secured or unsecured.

3. Increase Your Income

Brad Reichert, debt expert and founder and managing director of Reichert Asset Management LLC, offers advice for seniors who need to pay off debt. “If seniors can’t make adequate payments on their debt because they are on a fixed income, oftentimes, the most obvious solution is to increase their income."

"Finding an additional source of income can help provide some extra cash to put toward reducing debt,” Reichert explains. “With today’s new ‘gig economy,’ virtually anyone can find a way to earn extra income on the side, oftentimes from the comfort of their own home,” he adds.

4. Consider Debt Relief 

If you’re finding it difficult to keep up with your monthly payments, consider enrolling in a debt relief program customized for seniors that can accelerate your debt repayment, including:

Debt Consolidation

Seniors carrying multiple unsecured debts with high, variable interest rates, such as personal loans or credit cards with APRs above 25%, can consolidate them into a single fixed-rate loan to make repayment easier.

A “fair” to “good” credit report with the three major credit reporting firms (Experian, TransUnion, and Equifax) and an average FICO credit score above 680 may qualify you for a low-interest debt consolidation loan.

Another option, if you have a clean credit profile, is to apply for a 0% APR balance transfer credit card. If you pay off your entire balance within the initial zero-interest promotional timeframe, you can avoid interest costs. This can help you save money on the high interest charges you may currently be paying on your credit cards and other unsecured debts.

Debt Settlement

If you’ve already missed several payments on one or more of your bills or unsecured debts, debt settlement can help you settle your accounts, oftentimes for much less than you owe. 

Debt settlement companies can negotiate with your creditors to settle your balances for significantly less than your current balance, saving you up to 50% (before fees). This is an effective option for seniors on the brink of bankruptcy to eliminate large amounts of credit card debt.

4. Secure a Reverse Mortgage Loan

If you’re over the age of 62, a reverse mortgage allows you to borrow against the equity of your home. You can receive cash from this kind of loan on a monthly or discretionary lump-sum basis, provided you have enough equity in your home, and you maintain the home in good condition.  While you receive these cash dispersals, you won’t need to make any payments back to the bank until you sell the house or move.

This will provide you with access to money that can be used to pay down debts.  Since this new cash is not actually income but borrowed money, it's not subject to income tax at the state or federal levels.

Reverse mortgages come with fees and interest that are added to your loan balance each month. As the balance grows, your home equity decreases, since your home serves as collateral—just like it did with your original mortgage. This is important to consider if you rely on home equity for retirement or plan to leave your home to your heirs after you pass away.

5. Seek Government Assistance

While there’s no federal program offering help for seniors with credit card debt, you may qualify for federal government programs like Medicaid and Medicare.

The Medicare Savings Program can help you pay your health care premiums, deductibles, and copayments if you meet the eligibility requirements. The official website, Medicare.gov, offers more information on the program.

The government also has several programs to help low-income seniors get access to food vouchers and nutritious meals, such as the Supplemental Nutrition Assistance Program (SNAP) and the Seniors Farmers Market Nutrition Program.

What Happens if Senior Citizens Don’t Pay Their Debts?

Defaulting on debts can significantly lower your credit score, making it difficult to qualify for new loans or credit lines in the future. If you don’t make timely payments on your secured debts, like a car loan or mortgage, your property may be repossessed.

Failing to pay your debts can also lead to debt collection calls and letters, which can impact your stress levels. While debt collectors can’t garnish Social Security and Supplemental Security Income (SSI) benefits, they can still petition the courts for a judge’s order to tap into your bank account to collect the amount you owe.

What’s the Best Debt Relief Option for a Senior Citizen?

Saving for retirement should be a top priority for younger Americans. If you’re already retired, it's essential to create and stick to a budget to ensure you can afford your living expenses, both now and in the future.

If you’re finding it difficult to do this because of mounting debt repayments, talk to a financial professional to find the right senior debt relief program. You may need to consolidate or settle your debts, depending on how much you owe.

Let TurboDebt® Help You Pay Off Debt

If you're struggling to pay off big balances while living on a fixed retirement income, partner with TurboDebt®, a trusted debt relief organization.

With an A+ rating from the BBB and over 20,000 positive reviews across Google and Trustpilot, we've proven ourselves as a trusted source of consumer debt relief. 

Our customized debt repayment plans help seniors pay off debt faster for less than what they owe. It only takes a few minutes to find out if you qualify for our program. Contact us today and get started with your free consultation!