As retirement approaches, many California residents find themselves far from prepared to set aside their careers and move into a new phase of life. Often, financial strain and a series of unforeseen circumstances leave individuals unable to begin retirement in the way that they once imagined. A significant percentage of aging Americans are facing unmanageable debt, just as their working lives are beginning to wind down.
In some cases, the recent economic downturn led to reduced income and the need to lean on credit cards and other forms of borrowing to make ends meet. Many families found themselves having to charge a portion of their monthly living expenses, and hoped to have the ability to repay those high-interest balances when the economy recovered. For some, the pace of recovery has been insufficient to attain those goals, and the end result is a mountain of debt and virtually no means of paying it down.
Debt reorganization can offer help in some cases. This process is most effective when consumers take advantage of professional credit counseling services. A good credit counselor can help an individual assess the extent of their debt, work with creditors to reduce interest rates and fees, and create a plan to repay those obligations over a period of time.
In some cases, however, unmanageable debt levels mean that repayment is simply not a viable option. For these California residents, personal bankruptcy may offer a faster and more effective path to debt relief. The best way to determine the right course of action is to research all available options, and be willing to seek professional assistance if needed.
Source: U.S. News & World Report, How to Confront Debt Before You Retire, Daniel Solin, March 4, 2014