According to the Federal Reserve, Americans now have the most outstanding debt in U.S. history — over $1 trillion.

While personal debt is an overwhelming burden, it’s a common and complicated issue for many older adults. Among circumstances such as insufficient retirement benefits, minimal savings, increasing health care costs and longer life expectancies – living on a fixed income is challenging. Throw in debt and the situation can quickly become unmanageable.

Financial counseling and debt management

Financial counseling takes a holistic approach to an individual’s financial situation. Assets and liabilities are reviewed by considering income, savings, credit and debt. The review, conducted by a certified financial planner, produces a set of recommendations to achieve the goals within the desired timeframe. This process provides a clear path to debt management.

Counseling is typically offered by a nonprofit organization and is free of charge. The result is typically a budget and action plan as well as a debt management plan if relevant. A debt management plan is a three to five-year repayment program that pays debts in full – often with significantly lower interest and creditor fees. Not everyone qualifies for free debt management, for some there is a monthly cost for the program that can range up to $75. Success rates vary by counseling organization; reviews can be researched online. Credit scores typically improve as debts are paid on time each month.

Beware of scams and bad credit counseling agencies

When contacting a financial counselor, be careful with the selection, as the industry has had a fair share of unscrupulous players. Older adults can be the target of identity theft and scam artists because some people may be more trusting, have more savings and are less likely to monitor their credit. Learn more about current scams targeting seniors.

NCOA has partnered with GreenPath Financial Wellness to advise older adults who are looking to be more economically secure. GreenPath meets NCOA’s Standards of Excellence for financial counseling of older adults and has a long history of providing unbiased financial assistance. GreenPath certified counselors have been empowering people to lead financially healthy lives since 1961, and has assisted more than 200,000 people annually to achieve their financial goals.

To speak with a GreenPath counselor, call toll-free 1-866-217-0543. All calls are free and confidential.