Many senior citizens, especially those who do not have an adequate amount saved for retirement, frequently face financial difficulties. Statistics also suggest that senior citizens are filing for bankruptcy at a greater frequency than they did 13 years ago. In reality, filing for bankruptcy in some situations is the best way to obtain financial relief. This article will discuss why more senior citizens should consider bankruptcy.
The Types of Bankruptcy
It is critical that anyone who files for bankruptcy understands that the process is irreversible and cannot be undone once a person has entered it. Senior citizens have two types of bankruptcy from which to choose, which include the following:
- Chapter 7 bankruptcy. In this process, you begin by providing the court with information about all existing debts. Chapter 7 bankruptcy is available to senior citizens whose income is below the state’s median level. During this process, most of a person’s debts are relieved and any non exempt assets are sold to pay off creditors. If a person has enough disposable income to finance a Chapter 7 repayment plan, they will not be eligible for Chapter 13 bankruptcy. The primary advantage of Chapter 7 bankruptcy is that a person will not be required to repay debts. Some of the debts that are not discharged in Chapter 7 bankruptcy include alimony and child support payments, debts not listed when a person first listed their debts, and debts incurred through fraud.
- Chapter 13 bankruptcy. This type of bankruptcy is available to individuals who owe more than $250,000 in unsecured debt or greater than $750,000 in secured debt. While unsecured debt includes things like credit card or medical bill debt, secured debts includes mortgages and vehicles as well as other property that the owner can seize if a person fails to make payments. With Chapter 13 bankruptcy, the primary advantage is that a person maintains ownership of property while repaying debts through a payment plan.
Bankruptcy and Medical Bills
One of the most common situations that requires senior citizens to file for bankruptcy are medical debts. Filing for Chapter 7 bankruptcy can diminish all of a person’s medical bills within several months. It is important to remember, though, that bankruptcy is only capable of eliminating debt that a person has at the time of bankruptcy. This means that if you are about to incur more medical bills and debt, you should wait before filing for bankruptcy. If you file for Chapter 13 bankruptcy, medical bills will be included in a repayment plan which means that a person might be required to pay a certain amount of the medical bills.
Speak with an Experienced Bankruptcy Lawyer
Bankruptcy is not the only option that senior citizens experiencing financial difficulties have. Some of the other options to be considered include debt consolidation, debt deferment, and debt negotiation. To determine if bankruptcy is a good option for you, it is a wise idea to speak with an experienced bankruptcy attorney like Jim A Lyon who has helped many other individuals navigate these issues. Contact attorney Lyon today for assistance.