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.