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What are the pros and cons of bankruptcy for seniors?

On Behalf of | Sep 15, 2022 | Chapter 7 Bankruptcy

When economic times are tough in America, it typically affects everyone, even senior citizens. More and more U.S. elders are having a hard time managing their debts in the 21st century.

As some of the nation’s most vulnerable citizens, elders need debt relief options that do not compromise their security. For example, if they still reside in their homes, it needs to remain protected.

Can Chapter 7 bankruptcy help?

A successful Chapter 7 bankruptcy has several benefits for elderly citizens. It can dispose of your credit card and medical debt and put a stop to aggressive collection techniques. Chapter 7 can also add some extra protection to your retirement accounts, which are already safe from creditors.

Since most elders are not interested in financing a new car or home, the impact bankruptcy has on their credit might be minimal. Perhaps most importantly, you can probably keep your family home after a Chapter 7 in Florida.

What are the downsides?

If most of the debt you carry is for student loans or family law obligations (alimony, child support, etc.), chapters 7 nor 13 will help you much. These debts are not eligible for a discharge through any form of bankruptcy.

You may also need to part with some of your personal possessions. For those that have accumulated substantial sentimental property over the years, this can be a tragic side effect of bankruptcy. The family heirlooms passed down through the generations may also be at risk.

The takeaway

Senior citizens subsisting on a limited and fixed income should seek a legal opinion before making significant changes to their financial arrangements. Professional guidance and knowledge of the laws governing your bankruptcy ensure you make no regrettable mistakes.

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