How to Escape Debt If Social Security Is Your Only Income

If Social Security is your only income, paying off debt may feel impossible.

But with the right plan, it’s possible to manage or reduce your debt without risking your benefits.
 

1. Know Your Rights: SSI and SSDI Are Protected

Your SSI and SSDI payments are protected from most creditors.

Credit card companies and medical debt collectors generally can’t take this income.

However, federal debts like student loans, back taxes, and child support can be garnished from your Social Security benefits, so it’s crucial to know what type of debt you have.

 

2. Review Your Finances

Write down:

• Your total monthly SSI or SSDI income

• All your monthly expenses

• Your debts, amounts, and interest rates

This will help you see where your money goes and find areas where you can cut expenses, even on a tight budget.

You’ve earned certain benefits! Make sure you’re getting them here.

 

3. Prioritize Debts

Pay attention to:

1. Federal debts (student loans, taxes, child support) first, as they can affect your benefits
2. Debts with high interest rates to avoid them growing larger

Debts with private creditors like credit cards can usually wait or be negotiated.

 

4. Negotiate with Creditors

Many creditors will work with you if you explain your situation.

Request a payment plan based on your income or ask about lowering interest rates.

Remember to request a settlement or debt reduction if possible.

You can also reach out to nonprofit credit counseling agencies to help you create a plan and negotiate on your behalf.

 

5. Seek Free Credit Counseling

Free, certified credit counseling can:

• Help you build a realistic payment plan

• Consolidate your debts into manageable payments

• Provide advice to protect your credit

Search for HUD-approved or nonprofit agencies for free counseling in your area.

 

6. Consider Debt Forgiveness Options

If you are unable to pay your debts due to very low income, you may qualify for:

• Debt forgiveness programs

• Debt cancellation under hardship

• Free legal aid for seniors or individuals with disabilities

Contact local legal aid offices or disability advocacy groups for guidance.

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