At one time, those filing for bankruptcy tended to be younger people. Seniors were presumed to have secured their retirements with pensions and hefty savings accounts. If that were not the case, it was assumed that elderly parents would live with adult children and all would be well.
Unfortunately, a large number of today’s seniors are under extreme financial pressure with few available options. Dave Ramsey, the well-known financial advisor, estimates that only 3 out of every 100 seniors were able to write a check for more than $600 out of available funds. One of the major factors leading to this frightening level of financial insecurity is medical bills.
It’s common for people to work, either full- or part-time, beyond the age of 65. However, depending upon the income from a job is almost certainly doomed to failure. While as many as 60% of those newly retired may continue to work, over time the percentage of working elders decreases. Health problems are often a major factor, putting a double hit on fixed incomes when the loss of employment income is combined with increased health care expenses. Chronic health problems necessitate frequent doctor visits and expensive medications. Credit cards are used to fill in the gaps between income and expenses. All it takes is one serious illness to send this financial house of cards tumbling to the ground.
Filing for bankruptcy may be something that had never been considered, but may make financial sense. Equity in the home and most retirement accounts will be protected from creditors. A Chapter 7 bankruptcy will eliminate most debts. It is necessary to pass a means test in order to qualify, but Social Security benefits will not be counted as income. Higher-income seniors may be able to file for Chapter 13 bankruptcy. This requires court-ordered repayment of debt over 3-5 years but at a greatly reduced monthly payment. At the end of this period, the remaining debt would be discharged.
Seniors who find themselves in severe financial difficulty should consider consulting Bankruptcy Attorneys to learn about the available options. This will not be the answer for everyone, but it’s always worthwhile to make decisions based on facts. Those living in the Chicago, IL region will find that the Bankruptcy Attorneys at Chicago Debt Solutions are very knowledgeable.