Special Considerations For Seniors Facing Bankruptcy
As our lifespan widens, so does the need for expensive medical care. When you add to that the rising costs of utilities, housing, and food, you get a group of people who might need some debt relief in their golden years. Read and learn more.
Rising Unsecured Debt Loads
Chapter 7 may be known as the fastest and most efficient way to make a fresh financial start for good reasons. Credit cards, medical, personal, and signature loans can all be classified as unsecured debts. When you don't make payments on an unsecured debt, the creditor cannot take your property. On the other hand, the creditors could sue in court and a judgment could place your income in jeopardy using wage garnishment. Fortunately, your Social Security is protected against wage garnishment practices. However, your other retirement investments may not be. Also, you can have liens placed on your home if the creditor gets a court judgment against you for unpaid unsecured debts.
Stopping the Punitive Actions
To stop court judgments from taking effect, file for chapter 7. As soon as you file, the automatic stops put an end to wage garnishment along with liens on your property. It can also mean a temporary halt to vehicle repossessions and home foreclosures. However, these two debts are secured debts meaning that unpaid bills can result in the eventual forfeiture of that property. That means you need to get your mortgage and auto loans caught up or you could lose those items after a few months of reprieve. One more great thing about the automatic stay is that it stops creditors from contacting you in any fashion. To find out how to pay secured debts on things you want to keep, speak to your bankruptcy lawyer.
Homestead Exemptions
In many cases, seniors cannot afford to start over again when it comes to housing. If you are a homeowner, keeping your home is of prime importance and that is especially true for seniors on a fixed income. With bankruptcy, your home might be vulnerable to seizure. However, many states offer filers a homestead exemption which applies to a filer's primary residence. Each state is different, but some states allow the filer to keep their home, and some allow them to keep their homes using a sum of money that is deducted from the home's value.
If you are a senior citizen about to file bankruptcy, speak to a Chapter 7 bankruptcy lawyer about using your state's exemptions to keep your home and more.