Debt is an issue that plagues millions of people across the country. Managing money is a skill that comes easy to some and not so easy for others. Even senior citizens can experience debt. Some go into debt late in life even after never having debt earlier in life. This typically happens after the senior has entered into retirement and a steady, healthy income has stopped. So, is bankruptcy the best option for seniors who are struggling with debt?
There are typically two options on the table for seniors who are facing debt after retirement: Use retirement assets to pay down the debt or file for bankruptcy. The better of the two options is to file for bankruptcy. This is especially true if the senior has already paid off the mortgage on his or her home. The reason for this is that they will experience less of an impact on having a poor credit score.
Some other benefits to filing for bankruptcy as a senior include the possibility of wiping out any existing medical bills and that the retirement accounts might not be touched. Most retirement accounts will be exempt from the bankruptcy filing, which means the seniors will still have them when they exit the bankruptcy plan.
For seniors, the best bankruptcy option in most cases is Chapter 13. The senior won't have to sell any of his or her property when he or she files for Chapter 13. They will simply have to repay their debt over time. The senior will need to prove to the court that he or she has the ability to repay the debt in order to file for Chapter 13.
Are you a senior struggling with debt in Long Island? An experienced Chapter 13 bankruptcy attorney can help you understand the situation and get a hold of what to do next.
Source: Elder Law Answers, "Bankruptcy May Be the Better Choice for Debt-Laden Seniors," accessed Nov. 02, 2017