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3 Concerns For Seniors Filing For Bankruptcy

10 February 2015 by Louise Boyd

Due to a wide range of issues, including decreased pensions, more elderly Americans are facing financial woes. One possible solution to resolving those problems is filing for bankruptcy. There are special considerations that should be taken into account if you are a senior citizen and thinking of filing for bankruptcy. 

Medical Bills

Unfortunately, as you age, you can face an increase in medical bills. Medical bills are often a big share of the financial problems many Americans face. If you are overwhelmed with medical bills, filing for bankruptcy can work in your favor. 

A Chapter 7 bankruptcy filing would result in some or all of your medical bills being discharged. This means you would no longer be responsible for them and they would be removed from your credit history. 

If you have an upcoming major medical procedure on the horizon, contact a law firm. Bills that you have incurred up to the point of the filing are included in your bankruptcy. A lawyer can help you decide the timing of your filing to determine if there is a way to possibly alleviate some of the financial strain from the medical procedure. 

Retirement Accounts

When you file for bankruptcy, a bankruptcy trustee will review all of the assets in your possession and could possibly choose to seize some of them. If you have retirement accounts, the idea of losing some or all of them can be a scary thought. 

In most cases though, you do not have to worry. Retirement accounts are usually exempt from bankruptcy. Federal laws protect accounts, such as your 401(k) and defined-benefit plans. If you have an IRA, it is protected up to $1,245,475 as of April 2013. 

Some retirement accounts are not protected though. If your retirement account is considered to not be legitimate, you could lose it. Your lawyer can help you determine before filing whether or not your account is legitimate according to the laws in your state and at the federal level. 

Social Security Benefits

A final concern that you might have is your Social Security benefits. When determining if you are qualified to file for bankruptcy, your Social Security benefits will not be counted towards the amount that you must meet to be eligible to file for bankruptcy. 

This works into your favor if a majority of your income comes from Social Security each month. You are probably in a better position to be eligible for Chapter 7 which means a discharge of your debts. 

Bankruptcy might not be the way that you wanted to handle your debts, but it is perfectly legal and can help give you a peace of mind. If you are unsure of whether or not you want to file, talk to a law firm like Larson, Latham, Huettl Attorneys. An attorney can help you assess your financial situation and laws that will apply to you.

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