Senior citizens in New York may likely be considering their retirement options. Retirement is often a time when people live off the hard earned money they have been saving for most of their adult life. Often, retirees may see the benefit of their hard work and have excellent credit scores. However, a new trend is creating financial difficulties for many seniors and opening them up to the possibility of asset forfeiture.
According to reports, more seniors are agreeing to co-sign student loans for their younger relatives. In fact, data shows that 2.2 million seniors — people older than 60-years-old — in the United States hold around $43 billion in student loans. Only a few years ago, seniors owed zero percent of the student loans in the U.S.
While at first glance this might not seem like a problem, in reality it can be. In many cases, new graduates are defaulting on their student loans. The tough economy has made it impossible for many graduates to find jobs and pay money back. Therefore, the federal government and other collection agencies are coming after seniors who have co-signed in order to receive payment.
In particular, the federal government can garnish social security benefits in order to ensure that student loans co-signed by seniors are getting paid. In some cases, people can lose up to 15 percent of their social security income in order to pay these loans back. This can create serious financial difficulties for people who are living on a fixed income.
Wage garnishment, and other asset forfeiture methods, can cause havoc for a New York resident. Without the money or the assets, people may not be able to meet their basic needs. Therefore, people should make sure they know all their legal options to stop repossession or wage garnishment before it gets to that point.
Source: Investopedia, “Seniors: Before You Co-sign That Student Loan,” Anne Mollegen, May 22, 2014