Do twentysomethings become credit card debtors in their
quest to acquire everything from fashion accessories to compact
Do baby boomers rely on plastic to keep their lifestyles
in lockstep with their neighbors, charging everything from
restaurant meals to days at the spa? No doubt.
In a society where almost every age group is maxed out
on credit cards, it shouldn't come as a surprise that older
Americans, too, are overextended financially. But before
he founded Debt Counsel for Seniors and the Disabled (DCSD)
four years ago, Jerome Lamet '52 was shocked by the enormous
credit card balances carried by many older Americans. Lamet,
a graduate of Northwestern University's School of Commerce
(the Kellogg School's predecessor) and the university's law
school, noticed a trend while serving as a bankruptcy trustee:
Among the growing ranks of those filing for bankruptcy were
an increasing number living on Social Security or disability
Hoping to save seniors the $2,000 to $3,000 cost of a bankruptcy
filing, and to establish a new niche for his law practice,
Lamet, 74, established DCSD to serve this segment of debt-troubled
Many of DCSD's 3,000 active clients, who are located throughout
the United States, once had debt loads of $10,000 to $35,000.
It's a crushing amount, especially considering most live
well below the poverty level on incomes of $800 to $1,000
"Debt management is not an option on that type of
income," says Lamet, adding that many racked up the
bills paying for prescription drugs or trying to meet basic
Because federal law prevents creditors from garnishing
Social Security payments, Lamet persuades these creditors
to write off what his clients owe, skipping an expensive
bankruptcy filing and a trip to court for those who can't
afford legal fees and often have limited mobility.
For a $175 one-time processing fee and a $15 monthly retainer,
Lamet and his staff of 13 handle all debt collector communications,
thereby eliminating a tremendous source of stress for clients.
After receiving as many as 10 calls a day from creditors,
one client told Lamet she was ready to commit suicide. Another
fielded calls urging him to pay his credit card debt from
a hospital bed, where he was laid up fighting cancer.
For their part, clients agree to say goodbye to plastic
permanently --- many get a bank debit card instead --- and
must make difficult choices as they find a way to live within
their limited means.
DCSD, which so far has relied mostly on word-of-mouth and
referrals to spread news of its service, may soon mount an
advertising campaign. Lamet estimates his potential client
pool numbers about 20 million --- the number of Americans
he says live solely on Social Security payments.
"He's creative, curious about the law and fearless
once he knows it's on his side," says Steven Jay Blutza,
whose financial services brokerage firm, Heartland Financial
Services, offers Lamet's help to its clients. "We have
senior people and disabled people who are despairing because
they are living on $700 or $800 a month and think they have
to go through the expense of a bankruptcy."
Lamet also draws praise from clients, who send holiday
cards and offer to pray for him, but he earns only ire from
the bill collectors, who want the money due to them. He can
understand: During his 45-year career, he has done almost
everything --- including debt collection.
Lamet defends his Depression-era clients to the end, saying
tortured by their inability to pay: "My
clients grew up putting money away for savings and believing
that you always paid your debts on time. They grew up in
an era where you always did the right thing."
Citing a decision by the U.S. Circuit Court of Appeals
for the Fifth Circuit, which held credit card issuers responsible
for making sure their customers have the ability to pay back
a debt, Lamet also places some of the blame back on the creditors.
He says many proffer plastic too easily, without checking
an applicant's income and financial history.
"During the '90s, a lot of plastic was given to people
and nobody was paying close attention," he says. "Some
of my clients still get credit card solicitations to this
--- Kari Richardson