Debt Forgiveness For Seniors: Stop Paying Credit Card Bills

Many seniors want to know how to stop paying credit card debt when deliberate delinquency is the key to negotiating forgiveness.

Issuing banks and collection agencies are businesses seeking a return on their investment. Often, they will agree to accept a settlement offer for one-third of the balance owed if they believe it is the best deal they can get.

Sometimes, immediate partial payment is better than nothing.

The key to negotiating debt relief is showing permanent financial hardship. Meanwhile, elderly adults can protect their resources and income from lawsuits by making themselves judgment-proof or threatening bankruptcy.

Stop Paying Credit Cards

Elderly adults should learn how to stop paying credit card debts as part of a relief negotiating strategy. Banks are more likely to accept a settlement forgiving most of the outstanding balance when two conditions exist simultaneously.  

  1. They get something immediately
  2. They fear getting nothing instead

Government Help

Before they stop paying credit card bills to negotiate debt relief, the elderly should first investigate options for government help. Deliberate delinquency has negative consequences you might want to avoid.

Free government money for seniors over 60 could help you satisfy these obligations without the nasty repercussions. By cutting costs for other everyday household expenses, you could save enough cash to make the problem go away permanently.

Do not overlook any opportunities to save money, even though the government does not reduce your revolving balances directly.

Financial Hardship

Senior citizens can stop paying credit card debt to signal financial hardship and generate the fear of getting nothing. Banks are more likely to accept a settlement offer when the person is behind on all obligations.

You might qualify for debt relief through a settlement program if you meet three primary criteria.

  1. Owe more than $10,000 in unsecured debt
    1. Revolving balances
    1. Medical bills
    1. Personal loans
  2. Have a steady stream of income
    1. Earnings through employment
    1. Social Security retirement benefits
    1. Regular distributions from retirement accounts
      1. IRA
      1. 401K
  3. Suffering financial hardship (behind on payments)

Settlement Offer

Elderly adults can stop paying credit card debt to divert their limited funds into an escrow account. Banks are more likely to accept a settlement offer when they get something immediately – even if only one-third of the balance.

Debt consolidation programs differ from loans, where you borrow from one lender to pay several others. In this case, consolidation means gathering your scarce resources into a single dedicated account so you can make a settlement offer.

You need to fund the escrow account somehow. Often, the only way for people overwhelmed by debt to come up with the money is to stop paying others.

Debt Forgiveness Programs

The elderly can stop paying credit card debts forever after the bank forgives the balance. Seniors can utilize each of the programs outlined below to protect their limited resources and enhance the collectors’ fear of getting nothing.

Judgement Proofing

Judgment proofing is a credit card debt forgiveness program easily implemented by the elderly to establish fear that the banks will get nothing from their collection efforts.

Judgment proof means that the collection agency is unlikely to get a positive return on its investment by filing a lawsuit, even if it wins. 


Wage garnishment rules help the elderly negotiate credit card debt forgiveness by making them partially judgment-proof. Collection agencies have less incentive to file a lawsuit when they cannot take a portion of future checks to satisfy an outstanding balance.

Collection agencies cannot garnish Social Security, making the return on investment for a day in court less favorable – especially if the person has no assets to go after.


Property liens act as a dual-edged sword for elderly adults negotiating credit card debt forgiveness by making themselves judgment-proof. The rules cut both ways for renters versus homeowners.

  • Renters do not own property, making them immune to liens
  • Homeowners with equity are susceptible to property liens

A property lien is a legal claim against the equity in your home, allowing collection agencies to receive compensation when you sell the real estate.


Asset seizure rules can help some senior citizens negotiate credit card debt relief by making them partially judgment-proof. In a successful lawsuit, a collection agency cannot take money held in specific retirement accounts.


The Employee Retirement Income Security Act of 1974 (ERISA) helps many seniors negotiate credit card debt forgiveness by judgment-proofing assets held in specific accounts.

Collection agencies cannot seize assets held in ERISA-qualified retirement accounts. They have fewer incentives to invest in lawsuits when they cannot take any of these funds.

  • 401K Holdings
  • Deferred Compensation
  • Profit-Sharing
  • Employee Welfare Benefits

Seniors with significant sums held in non-qualified retirement accounts can still negotiate credit card debt relief even though they are not judgment-proof. After a successful lawsuit, collection agencies might gain the right to seize these assets.

  • Individual Retirement Accounts (IRA)
  • Roth IRA
  • Checking, Savings, and Certificates of Deposit

However, federal bankruptcy laws protect IRA assets up to $1 million. Therefore, the threat of filing for Chapter 7 or 13 has teeth.  

Bankruptcy Protection

Filing bankruptcy is the nuclear bomb of credit card debt forgiveness for elderly adults. Sometimes, just the perceived threat that you might file Chapter 7 or 13 is enough to frighten them into a settlement.

Filing for bankruptcy on revolving debt is a last resort strategy because of the long-term damage to your consumer report and score. Bankruptcy is a significant derogatory mark that affects your future borrowing power.

  • Chapter 7: ten years
  • Chapter 13: seven years

However, you do not have to file for bankruptcy to make your strategy work. The banks know you have this option and respond to your signals.

Entering Nursing Home

Seniors should understand what happens to credit card debt when they enter a nursing home: nothing. Entering a long-term care facility does not provide additional legal rights, but expenses rise sharply.

Entering a nursing home depletes assets quickly, raising the fear for banks that they will get nothing in return for their continued collection efforts. The average cost of a long-term care facility is about $10,000 per month.

Therefore, going into a nursing home could elicit opposite responses from the bank or collection agency learning about your admission.

  1. Accelerate a lawsuit before the facility charges deplete any remaining liquid assets
  2. Cause the agency to cease any legal proceedings because you are judgment-proof