Month: May 2020
Due to inflation and rising medical cost, it is no surprise that bankruptcy among seniors is on the rise. However, compared to other debtors, there are some advantages that senior citizens enjoy in regards to bankruptcy. If you are elderly seeking debt relief, here’s what you need to know regarding bankruptcy.
Your Retirement Accounts are Exempt
For an asset to be exempt means that they are legally protected from creditors during a bankruptcy case. In most cases, this includes your retirement accounts. This holds true even when filing for Chapter 13 bankruptcy and the balance in them does not affect the amount you have to pay in the court issued repayment plan. For information on retirement accounts and bankruptcy, visit this article.
Most of Your Assets May be Judgement Proof
While exemption laws may vary from state to state, virtually all exempt such things as social security and retirement benefits, your car, household goods, and most primary residence. Since these are assets that creditors cannot legally go after, they are said to be judgment proof.
Most senior citizens typically only own these types of assets. This basically means that even if your creditor gets a judgment in a bankruptcy case, they cannot collect from. Thus, if you know that most or all of your assets are judgment proof, declaring bankruptcy could be a good way to stop their harassment and wipe out your debt without much penalty.
When Bankruptcy May Not be a Good Choice?
If you have plenty of equity and income that isn’t legally exempt than declaring bankruptcy would not make sense. Chances are that you are likely to lose an amount equal to the value of the debt you own if you file for a bankruptcy case plus end up paying on top of that the legal charges for making the case.
However, it is important to calculate realistically how much you are bound to lose in a bankruptcy case and getting a debt discharge vs. not filing and remaining burdened with mounting debt. In some cases, you’ll have more to lose in the long term by not filing. A consultation with an experienced lawyer is necessary to arrive at a clear picture of the bankruptcy prospects and whether it would make sense to file it or not.
Take Help From a Seasoned Attorney
Navigating through the bankruptcy process can be difficult alone, more so for the elderly. A seasoned bankruptcy lawyer is essential to getting the most favorable outcome out of the process.
At the Law Offices of Sean T. Flynn, PLLC, in Austin, TX, I provide personalized legal service to my clients filing for bankruptcy under Chapter code 7 and 13. With over 8 years of experience in the field, I will assist you in mitigating your financial troubles. To schedule an appointment, call 512.640.3340.
Most of us hope that we never experience bankruptcy; however, there is no telling when we could become its victim. Bankruptcy might be a taboo word for most people, but it isn’t new – it is a fact of life. Despite what people might say, it is possible to recover from it. Here is how you can get back on your feet after bankruptcy.
· Determine What Went Wrong
There is always a reason why an individual declares bankruptcy. To ensure that you don’t experience the same problems again, determine what went wrong. Here are some common reasons for declaring bankruptcy:
Most people in America file for bankruptcy due to medical debt, and that is why it is essential to have health insurance coverage.
Loss or Reduction of Income
Loss or reduction of income can make things very difficult for you. If this was the reason behind your bankruptcy, you would have to manage your expenses better in the future.
· Create a Budget
Following bankruptcy, you should create a budget. When creating a budget, set realistic restrictions on your spending and see your financial plan as a road-map to help you accomplish your savings goals. Set a goal of limiting all your expenses to 50 percent of your income. You can be flexible with your budget and adjust it as your financial circumstances change over time.
· Pay all Your Bills on Time
Bankruptcy may have discharged your larger debts, but you will still have some financial obligations. If you want to recover, you will have to pay your bills on time and avoid defaults or late payments, although it might be hard. Making late payments can have a negative impact on your credit report. Not only that, but this will also make recovering after bankruptcy more difficult for you.
· Rebuild Your Credit
You will have to rebuild your credit rating after some time, especially if you want to buy a new car, home, or invest in the future. Don’t try to rush into this; only take on debt that you can afford to pay off quickly. If you already owned a home and were able to keep it during bankruptcy, make sure to make timely repayments every month. Try to avoid products that lead you towards bankruptcy. For example, if you got into trouble because of credit card debt, then you should avoid applying for a credit card to re-establish your credit rating.
Bankruptcy isn’t the end of the world. If you stay positive and do everything we have discussed above, you should be able to recover from it and return to normal life. For questions and queries, feel free to reach out to us.