When Family Caregivers Take on Debt While Struggling Financially

Family caregivers tend to experience difficulties in several aspects of their lives. They can become emotionally exhausted and experience problems with their physical health. Some drink too much alcohol and rely on fast food takeout. Many develop financial problems because they have to reduce their work hours or take unpaid leave from employment. Once these individuals get back to full-time work, they may benefit from taking out a debt consolidation loan to roll several monthly payments into one lower amount. Anyone in this situation can learn more about options over at Debthunch.

Relevant Statistics

A report from the National Alliance for Caregiving and AARP released in 2020 states that 23 percent of family caregivers have accumulated more debt than before. With more than 50 million U.S. residents caring for a disabled relative, that is a substantial number. Getting paid for this work is a possibility, but usually only if the person being cared for is eligible for Medicaid or is a military veteran.

About 10 percent of these family caregivers devote at least 24 hours per week to this endeavor. They might need to drive several miles to the relative’s home. This creates more expenses in fuel and more wear and tear on the car. If the disabled family member does not have a vehicle, the caregiver may need to transport this person to medical appointments and other places.

The Disabled Person’s Income

In some instances, the disabled person has used up all savings and needs financial help from the adult children. This makes managing finances an even bigger challenge. Men and women often have no idea how expensive it could become to take care of those they love. The median Social Security monthly retirement benefit payment is about $1,300, translating to $15,600 per year. The median figure means that half of the recipients receive less than this. Some are paid a substantially lower amount.

Financial Struggles

Family caregivers commonly stop saving money and may start using their own savings. They might make the tough decision to use credit cards for buying necessities and paying bills instead of borrowing or withdrawing money from a retirement account. They can only pay the minimum amount on the balances and may have to take out a personal loan for additional money.

Debt Consolidation

To get finances back under control, being approved for debt consolidation can help. Ideally, the application would only be made after income has returned to normal. Otherwise, it may be difficult to make the monthly payment, even though the amount is lower. The caregivers might feel compelled to keep using credit cards to pay bills and buy groceries.

Most frequently, organizations offering debt consolidation service do so in the form of an installment loan or a line of credit. The line of credit is available to be used as needed, whereas the loan provides the entire amount as a lump sum. Before accepting either arrangement, the applicant should carefully consider the payment schedule and the interest rate. This allows prospective borrowers to make an informed decision.

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