Senior care advocates repeatedly remind families that oversight is needed in
some cases to ensure seniors do not fall victim to financial exploitation. Beyond protecting against scammers and hucksters, many seniors are
facing a new financial crisis that is not rooted in illegal misconduct. When on
a fixed income and struggling with confusing money issues, some seniors might
face incredibly severe financial penalties for falling behind on certain bills
or taxes. CNN Money reported this week on a growing number of individuals who are
losing their homes because they owe relatively small sums. A report from the
National Consumer Law Center (NCLC) detailed how some states have outdated laws that
allow states to sell tax liens on delinquent properties. This means
that instead of the government having a lien on a piece of property that owed
back taxes or bills for services like water and gas, private investors own the
lien. The investor then collects interests on the overdue bill or, in some
cases, forecloses on the home. Some states allow investors to charge
staggeringly high interest rates, from 15% to 50%.
Seniors are
particularly vulnerable to falling behind in this way, either because of
challenges of being on a fixed income or confusion with the bill paying process.
The NCLC report details one case of an 81-year old woman who lost the home she
lived in for 40 years because she owed $474 on a sewer bill. The NCLC report noted that seniors with cognitive diseases, like dementia and
Alzheimer's are prone to fall victim to this situation. It is very confusing to
follow the changing financial arrangements. The seniors are usually notified of
the situation in legalese that many do not understand. As a result, they do
nothing, rack up interest debt, eventually default, and often lose their home. The report elaborated that seniors without family members or who have not
visited with elder
law attorneys and other professionals were more likely to be hurt by this
situation. In one case, an elderly woman who lived alone without family fell
back $5,000 on taxes. Eventually, she lost her home and lost about $150,000 in
equity that she had accumulated.
Advocates are working to change laws so that interest rates are lowered and
adequate warnings are provided to homeowners. It remains unclear if those
efforts will be successful, and so putting preventative measures in place now is
prudent for local seniors to avoid this situation.
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