Protecting Seniors in Bankruptcy
How will bankruptcy affect your retirement? This is a serious question for those contemplating bankruptcy after they have already retired from active work. Unfortunately, many seniors are faced with bankruptcy in today’s uncertain economic climate. According to recent data, seniors represent about seven percent of all bankruptcy filings, and that number seems to be increasing each year.
Retirement Stability May Be A Thing of the Past
In the past, retirement was supposed to mean financial stability. However, in today’s world, seniors are faced more and more often with difficult financial choices. While seniors tend to have more equity in their homes, they are also a frequent source of borrowing for children and grandchildren who are in desperate financial straits due to job loss or the need for college tuition. When seniors loan money to their family members, they may put their own financial future in jeopardy.
Six Considerations for Senior Bankruptcy
Seniors should always consider these six factors when facing financial struggles:
- Are my Social Security funds protected? If your Social Security is direct deposited, creditors may be able to access the funds through a bank account garnishment, even though Social Security is normally immune from creditor efforts.
- Are my retirement funds protected? Like Social Security, retirement funds that may be protected could be compromised if they are mingled with other money. It is important to designate which funds are retirement monies and which come from other sources, such as interest income.
- How much equity do I have in my home? A certain amount of equity is protected during a bankruptcy. However, some equity may be in jeopardy if it exceeds the statutory limit for exemptions. A bankruptcy attorney can help seniors determine if they are in danger of compromising their homes.
- Could this affect my ability to get into a private retirement home? The law protects discrimination on the part of public nursing homes, but private homes are a different matter. They may be able to reject an applicant due to bankruptcy.
- Will my medical bills be discharged? Medical bills are a leading cause of senior bankruptcy. However, they may not be discharged under certain plans. Since every situation is different, it is important to have the input of a bankruptcy attorney.
- Am I judgement proof? If you have no property for creditors to take, bankruptcy may be a needless expense. Talk with your bankruptcy attorney about options.
The experienced attorneys at the Oswalt Law Group are ready to help seniors who are contemplating bankruptcy. Contact us today!