Many seniors are struggling to make ends meet. As people live longer, they have more medical expenses, and the soaring cost of medical care is depleting many seniors’ savings. Suddenly, many seniors are finding themselves unable to meet their basic needs, much less pay off debts they owe, and are seeking protection from creditor harassment.
AARP reported that bankruptcy filings among those 65 years and older jumped 150 percent between 1991 and 2007. The number of bankruptcy filings increased most dramatically among those aged 75 to 84 years, up 433 percent. Seniors having trouble paying their bills may want to consider some of the benefits of filing bankruptcy.
Financial Protection for Seniors
When weighing debt relief options, seniors should first investigate whether their assets are protected under other laws. For example, creditors generally cannot garnish Social Security funds, so if Social Security is a senior’s only source of income and he or she does not have significant assets such as a home or a car, the only thing he or she may need to do to end creditor harassment is write a letter to the creditors informing them that there is nothing they can legally take.
The Benefits of Bankruptcy for Seniors
Seniors who have income and assets other than those that creditors may not legally garnish may decide to pursue bankruptcy protection for a number of reasons. Once a person files bankruptcy, the court issues an automatic stay that stops all forms of collection actions – including foreclosures. Seniors facing the possibility of losing their homes could use bankruptcy as a way to save them.
Bankruptcy also allows exemptions from what the bankruptcy trustee can take to liquidate to repay creditors so that the debtor can continue to meet his or her basic needs. For example, bankruptcy law allows housing and vehicle exemptions, as well as a variety of other safeguards.
One of the biggest benefits for seniors filing bankruptcy may be the peace of mind they will have knowing that they no longer need to worry about creditor harassment and possibly losing all of the things they hold dear.
Talk to an Attorney
Bankruptcy law is complex and the application of the law varies depending on each person’s circumstances. If you are considering filing bankruptcy, talk to an experienced bankruptcy lawyer who can help you decide what steps are right for you.