Seniors sorting through billsIt's been well-documented that the recession was particularly hard on senior citizens; the number of older Americans filing for bankruptcy has climbed, in large part due to a perfect storm of expensive medications, declining value of real estate holdings and a stock market crash that crushed their nest eggs. In desperation, many seniors turned to credit cards to cover their expenses, and now they're spending their golden years with enormous debts -- debts they probably won't be able to pay back in their lifetime.

A recent study cited in Newsweek shows a pair of related trends on a collision course: More than half of all people today are retiring with debts, but fewer than 5% of those say they'll delay retirement to pay down their debts. Experts say this means that more elderly Americans will be hounded by creditors, and the heirs of these seniors are likely to be cajoled or outright bullied by collectors into paying for their loved ones' debts after death -- debts that survivors legally have no obligation to pay.For seniors with no assets and no income except for Social Security and certain types of pensions, creditors don't have any really good tools to force them to repay debts. But these Americans are bound to be subject to harassing phone calls by collectors and will likely find it difficult, if not impossible, to secure credit in the future.

If the thought of all these debts being run up and going unpaid makes you see red, consider this: Most seniors aren't using their credit cards to buy new golf clubs or take cruises. Instead, researchers say, three-quarters of them are relying on plastic to pay for necessary medical expenses like prescriptions, whose prices have continued to rise.

If you're nearing retirement, how do you avoid a debt spiral? Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, recommends that older Americans delay their retirement if they've accrued significant credit card debt. She also suggests that seniors delay drawing Social Security for as long as possible to maximize the amount they'll be able to collect each month.

"None of us knew what was in front of us when the recession hit -- no one intended for this to happen," she says. "Well-meaning seniors are struggling to pay their debt." For seniors who hope to leave an inheritance to their children, this is particularly problematic. While creditors can't force an adult child to pay a parent's credit card bills after death, they can and often do come after the estate to make good on the debts.

If you're still in the workforce, hang onto that job until your existing debts are paid off, echoes Rodney Tullie, a certified credit counselor at CredAbility, a nonprofit credit counseling organization. "A lot of times people retire too early," he says, "and don't have enough income [during retirement]. They retire at 62, and they should've just kept working."

Even when people wait until 65, he adds, a growing number of Americans don't draw enough income in retirement to cover their debts. What happens in many cases, Tullie says, is adult children step in to bail out their parents, but today's middle-aged adults are also struggling financially, creating a burden on two generations of Americans.

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