Do you have a question about consumer credit? You may find an immediate answer by using the search engine. If you can't find what you're looking for, please fill out the form, being as specific as possible.
Please note: The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team will include it in a future column.
The information contained in this column if for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding your particular situation.
Please understand that Experian policies change over time. Column responses reflect Experian policy at the time of writing. While maintained for your information, archived responses may not reflect current Experian policy.
Topics addressed on October 17, 2007:
Even with a fixed income you must still pay your debts
My mom and I got into an argument. She wants to stop paying her credit cards because she is on a limited income and gets only Social Security and a small pension. She believes that because she gets direct deposit for both that the credit cards cannot do anything if she doesn't pay. I disagree. Is there anything else I can tell her to convince here that even though she is a senior she still can get into trouble?
I’m afraid your mother can’t just quit paying the debts she owes. Retirement and a fixed income don’t release her from those obligations.
They may not be able to garnish her wages, but credit card companies and others to whom she may owe debts still can collect those funds through collection agencies and by seeking court judgments if the collection efforts are unsuccessful.
Whether lenders can somehow force automatic withdrawals from her Social Security and pension payments is beyond my expertise. Someone in your state’s department of consumer protection may be able to provide more information in that regard. Those organizations are often part of the state’s office of the attorney general, so you should be able to find contact information online.
I assume that one way or another she will lose her credit cards and likely will be unable to get new ones. If she cannot manage her spending, cancelling the cards may be for the best. However, if she still drives or travels, it can be very difficult to use only cash, particularly if she is renting a car or reserving hotel or motel rooms. In those cases, you often are required to have a valid credit card.
Now more than ever your mother needs to learn to control her debt and manage her spending. Because she is on a fixed income, her options for repaying debts if they get out of control are much more limited than in the past.
It might be a good idea to try to convince her to attend a financial management class, and maybe you could go with her. I think she might learn a lot that would help make her retirement much less financially stressful. By offering to go with her, she may be more willing, and you might learn a few helpful things as well.
Thanks for asking.
- The "Ask Experian" team