When we were young, our golden years seemed a lifetime away. We’d magically never grow old or sick or poor. Then those golden years turned to lead for some of us, and debt piled up. Some lost homes, some lost hope.

FREE DEBT ADVICE

The Pro Bono Project of Mesa County and Colorado Legal Services can help seniors who find themselves overwhelmed by financial burdens. Andrea Rosenberry, the staff attorney for Colorado Legal Services presented a seminar at Grand Junction City Hall recently to clarify common misconceptions about debt.

Rosenberry recommended checking your credit report every year by using www.annualcreditreport.com. The report shows your accounts, such as credit cards and car loans, and their status. If you spot an error, dispute it with the reporting agency. When credit goes wrong, creditors use several means of getting repaid, including suing you or garnishing your paycheck. They can also take money from your bank account, record a lien against your home, or even force you to sell your property if you own it outright.

Rosenberry advised people to take care of themselves, not bills, first: food, medicine, housing. Don’t cash out retirement, life insurance policies, and IRAs. They cannot be garnished! Also, don’t give cash or property to relatives or friends. The courts can take gifts back to pay debts.

Repossession and foreclosure result in cars and homes being sold, and you’re still liable for any balance left after the property is sold.

So what can you do? Negotiate directly with the creditor, even the IRS. Avoid paying a company to settle your debts, and don’t consolidate your bills. Pay off the debt with the highest interest first, then work your way down the list.

WHEN TO CONSIDER BANKRUPTCY

Bankruptcy may be the only way out for thousands of older Americans, especially those affected by a catastrophic illness. Even with insurance, they may lose everything.

Don Bell, a local bankruptcy attorney, advised people to contact an attorney when they first realize they’re in trouble. Almost every bankruptcy attorney offers a free consultation.

“Chapter 7 bankruptcy is liquidation. You get to keep exempt assets up to a certain value. Non-exempt assets are sold, and if there’s money left after the creditors are paid, you get it. Chapter 13 bankruptcy allows you to pay the judgment over three to five years,” he said.

After almost 20 years with an oil field construction company, Jeff Knapp was laid off.

“I worked 60-hour weeks and was making good money,” said Knapp, 59.

He found another job that paid less and offered him fewer hours. Then he was laid off again.

His wife, Fran, 64, lost her job due to medical issues, including cancer. Then Jeff had a heart attack. Neither qualifies for Medicare, and they are without medical insurance. Jeff’s unemployment check is just high enough to exclude him from Medicaid.

They contacted Bell, then opted to file for Chapter 7 and were able to stay in their house.

There are many more legal pitfalls when you’re plagued with debt. Contact Rosenberry at Colorado Legal Services, 243-7940, ext. 3, or Bell at 239-1139 for guidance.