If you are like many adults, your role with your parents has shifted. You are now the caretaker and they are in need of your assistance. When you have a parent that is struggling financially, it is natural to want to help them. In today’s economy, many grown children provide their parents with financial assistance. However, if you cannot afford to support them financially, you may want to explore their options for obtaining debt relief.
Many senior citizens file a personal bankruptcy in order to get their financial life back on track and to make your financial assistance no longer necessary. The first step is to determine the type of debt that your parents have and whether they qualify for a Chapter 7 or Chapter 13 filing.
Many elderly adults have a significant amount of medical debt, especially if they have had a lengthy stay in the hospital. You may also discover that your parent has a significant amount of credit card debt. These types of debt are eligible for discharge or elimination in a bankruptcy filing. Additionally, as soon as your parent files a bankruptcy case, the automatic stay goes into effect and safeguards them from any further harassing calls and letters from debt collectors. This can be a relief because many seniors are easily distressed by this type of collection activity, so the reprieve is a valuable factor in filing a case.
It is important to understand that your elderly parent’s income from Social Security is protected under bankruptcy law. In fact, their retirement benefits are also likely to be protected. Most 401(k) accounts, IRAs and pensions are exempted from being included in their bankruptcy estate. If your parent owns a home, he/she must continue making the mortgage payments during the bankruptcy in order to keep the property. However, if your parent wants to surrender the real property back to the mortgage lender, he/she can do so and discharge any remaining deficiency balance. This can save your parent thousands of dollars!
We understand that making such an important decision for your parent can be difficult. Let us help you and your parent understand their financial situation and what debt relief options are available. We can answer questions and help create a strategy everyone is comfortable with pursuing and that will provide the greatest amount of financial relief possible.
We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, P.C..