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Photo of attorneys Shelley Slafkes and Bruce Levitt
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Seniors can Save Assets by Filing Bankruptcy

On Behalf of | Jun 12, 2015 | Bankruptcy Basics, Seniors and Bankruptcy

If you are retired and creditors are calling, it may be time to consider filing a personal bankruptcy. If your income is at a set amount and you see your debt is increasing, it can feel hopeless. However, filing for bankruptcy protection can allow you to gain control over your debt and hit the financial reset button. After all, don’t we want to leave money and assets to our loved ones and not debt?

For many older Americans, filing a Chapter 7 or Chapter 13 case can provide necessary relief from medical debt. Even with insurance, an extended stay in the hospital or costly treatments can result in overwhelming debt. Many experts believe that filing a personal bankruptcy is an effective tool for protecting retirement assets. Sadly, however, it is common for the elderly to avoid seeking the debt relief they need because they are embarrassed to admit they are having financial difficulties.

When you postpone filing your bankruptcy case, it can result in you losing money and assets that would be protected in your filing. For example, taking money out of your retirement account to make ends meet depletes an account that is fully protected or exempt in your bankruptcy. The better approach is to safeguard your assets and eliminated your debt as soon as possible.

Retirees typically can avoid losing their home by claiming a homestead exemption, which protects your equity in your principal residence. It is important to confer with a local attorney to determine your state’s homestead exemption amount and fully understand how it will impact you.

Filing a personal bankruptcy will have a negative impact on your credit score, but most seniors do not rely on their credit score as much as they did earlier in life. For example, many retirees are living in the home they intend to have until they die, so they do not need a high credit score to qualify for a mortgage loan. Additionally, if you are past due on payments or you have accounts that have gone into collection status, your credit score has already been damaged. Thus, filing a bankruptcy and eliminating your debt is the first step in rebuilding your credit score.

If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, P.C., at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.