Trapping Lower Income Elders

Gotcha!

Predatory lending and financing don't just trap seniors; it is just that elders are more vulnerable and less able to pay exorbitant interest and fees than our younger counterparts. Millions upon millions of American elders have zero emergency buffers. Stuff happens, and predators know they have temptation on their side. Generally elders do not opt to incur overdraft fees or payday loans for luxuries, because they know it is nearly impossible to bail out. Most go without furnishings and electronics, rather than rent or lease them. The majority of seniors who fall into the traps, however, do so, because they cannot meet basic needs. The notion of borrowing to cover a short term contingency is the premise that permitted payday lenders to claim legitimacy in the first place. Of course the reality is quite something else; certainly emergencies arise, but a payday loan is designed not to be paid off! Hence the term debt trap.

Conscience may not be on our side; guilt is pervasive in poverty. Once we retire, unless we retire wealthy, our lives become constricted. An estimated 1 in every 10 retirees today lives below the poverty line. Guilt attaches, particularly if we cannot earn our way out of debt. Even if we can, the issue becomes lifestyle. If we were properly raised and educated, we customarily attend family and other social events, looking our best and on our best manners. We take hostess gifts, and give gifts to celebrate milestones in peoples' lives. We write thank you cards, send holiday greetings, write nice letters on good stationery. In our prior lives these were not extraordinary expenses, quite the contrary. For many of the nation's elders, the more likely scenarios are foregoing groceries or medications, skipping the utility bill or paying a copay for a visit to a medical specialist. We feel terribly guilty asking for help, because it feels as though we cannot manage our finances. The following are guides, available online to help seniors manage. https://www.fdic.gov/consumers/consumer/news/cnsum13/Summer2013C.pdf
http://www.stopfraud.gov/protect.html

As often as we find ourselves having to relinquish things we've always taken for granted, life has a way of becoming worse! It is Murphy's Law. A chest of drawers cracks and peels, a sofa grows dilapidated, saggy, and dingy. The twenty something phone stops functioning. A relatively new set of dentures slips from your hands. The lower plate breaks, and the dentist says, no, he cannot just replace it. An elderly pet becomes terminally ill, must be euthanized and, of course, cremated. If no other resources exist, high-interest loans are not the answer, I promise. We know making the payments may take a long time, and sacrifices will have to be made. In fact it is not that simple. These loans were designed to keep people in a cycle of debt. The next revelation is the lender's efforts to invite you to open yet another loan, even though you have struggled to meet payment deadlines. If you default and decline to open another loan, the lender swamps you with telephone calls. (Speaking of guilt, if you find yourself having to confess you took out an unsecured loan, people will consider you mad ... with reason.) Rather it is a lesson learned, and you are, by no means, alone in learning it. Here are a few helpful facts and some after-the-fact advice:
http://www.daveramsey.com/blog/get-out-payday-loan-trap
http://www.marketwatch.com/story/cfpb-proposes-new-payday-lending-rules-2015-03-26-91034835
http://www.consumeraffairs.com/payday-loans-and-lenders?page=2

Poverty entails fear and stress and sometimes depression. It meets a thousand petty humiliations and hardships. Climbing out of poverty by your own efforts that is something on which to pride yourself but poverty itself is romanticized by fools. ~J. K. Rowling
Will predatory programs ever be legislated entirely out of our misery? The Center for Responsible Lending has testified in state and federal hearings. Abuses are so widespread and victimize so many vulnerable Americans, legislation has already been and will continue to be enacted. Meanwhile, if you are an elder or a family elder owes a payday lender and cannot pay, there are a couple of things to know. Only a government agency, such as the IRS can touch Social Security retirement benefits, for one thing. Here is a helpful link:
http://www.consumeraffairs.com/payday-loans-and-lenders?page=2

Just a quick word to the wise for elders experiencing long- or short-term financial hardship. Sometimes non-profits can offer help; however not all are created equal. Just be aware scams and scammers abound, particularly, on the Internet. For example American Hope Resources (AHR) boasts a great looking website and an F Rating from the Better Business Bureau! The National Gerontological Society is a safe site to visit, and can direct you to your State's Gerontological Society and its many resources. My State's Bar Association publishes a Senior Law Guide annually. Check to see whether your State's Bar Association publishes such a guide; it is invaluable. Senior fairs and events, although they have limited entertainment value, often provide good information.

Do the math, then, do the research. Take deep, cleansing, breaths. Stay safe; it's a jungle out there.