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In 2020, the total amount of consumer debt in the United States grew to a whopping $800 billion. Individuals in the Silent Generation (age 75 and up) carried an average of around $40,000 in debt while Baby Boomers (age 56 to 74) held an average debt load of more than $96,000.

If you're an older adult with debt, you're certainly not alone. But there are a number of ways you can deal with that debt. Understanding your options is the first step to creating a more stable financial future or meeting your money goals in life. Check out seven options for dealing with debt as a senior below to see if one might be right for you.

1. Start By Getting a Handle on Income and Expenses

The first step to dealing with debt at any age is to understand your situation inside and out. If you don't know how much income you have or how much you're spending, you can end up growing debt or getting back into debt before you know it. Follow the steps below to understand your income and expenses and make a plan for managing your financial resources.

• Gather statements of income for the past quarter. Figure out how much money you have coming in on average each month. Don't forget to account for periodic income that may not come monthly as well as any required minimum disbursements from retirement funds that might be coming up.
• Gather expense data from the past quarter. Look at copies of all your bills as well as a detailed list of all the spending you've done. Average out how much you're spending on various aspects of life each month.
• Consider where you can cut spending. Review your spending to see if anything is unnecessary. If you can cut down on monthly expenses, that leaves more room in your budget to make extra debt payments. Some options to consider include subscriptions you don't need or use, eating out or takeout, or luxury items you may be able to swap out for more budget-conscious ones.
  
  

2. Consider Whether You Can Generate Additional Income

If you don't think you can cut down on expenses, another option is to generate more income. You can use that income to pay down debt faster. Retired adults may need to balance how much they make with thresholds that could impact their benefits or tax burdens, so consider consulting a tax or finance professional before you take this step.

Some options for making more money as a retired adult include:

• Making and selling craft items — you could do so in person at local craft markets or online
• Working a part-time job
• Providing consulting services if you have an area of expertise

3. Think About Downsizing and Selling Your Home

If you have a mortgage, your home may be one of your biggest monthly expenses. If you don't, you could have a lot of value in the home that could be used to pay down debt or fund living expenses.

Consider selling your home, especially if the market is hot and you can get a good price. You might consider downsizing into an assisted living community such as Hickory Villa in Omaha, where many living expenses are lumped together under a single payment to provide convenience, peace of mind and potential savings.

4. Research Reverse Mortgages and How They Could Help

If you're not ready to move out of your house yet but have a good amount of equity in it, you could consider a reverse mortgage. These are loans you take out that pay you a single lump sum or an ongoing sum each month. The money is secured by value in your home, and it doesn't have to be paid back until you sell the home or move out.

Depending on your financial situation, a reverse mortgage could be a way to handle your other debts so you can live in your home without a financial burden.

5. Look at the Cash Value in Life Insurance Policies

If you no longer need life insurance because your beneficiaries are all grown and financially set, you might consider cashing out any policies with value to pay off your debts now. That's especially true if you only have the policies to ensure the debts can be paid later.

As with other tips on this list, if you're making any changes to estate plans or other long-term plans, it's a good idea to consult a professional for advice.

6. Reduce Your Interest Rates With Smart Money-Management Tactics

In some cases, you might be able to make it easier to pay down debt by reducing your interest rates. If you've worked with a lender for years or decades and are an account-holder in good standing, it doesn't hurt to ask. Simply call the customer service line and ask if you might qualify for a reduction in interest.

If you're dealing with credit card debt and have decent credit, apply for a balance transfer card with a 0% introductory offer. You can transfer higher-interest balances to it and pay it off faster because you won't be paying for interest during the introductory period.

7. Consider Bankruptcy Options as a Last Resort

If you're dealing with crippling debt and none of these options will work for you, it might be time to consider bankruptcy. Contact a bankruptcy attorney to find out more about your options.