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Can bankruptcy help seniors citizens?

A lot of seniors are suffering under a mountain of debt -- money owed due to medical expenses, debt caused by giving too much money to their children, and debt created by many other kinds of uncontrollable factors. In many cases, bankruptcy can help seniors preserve their retirement savings so they have something to leave behind to their heirs -- something other than debt.

Still, even though the process could be beneficial to them, a lot of seniors never engage on the bankruptcy process because they are worried about the stigma involved with being in bankruptcy. Indeed, the age-old embarrassment of appearing "financially irresponsible" is just too much for them to bear. According to a sociology professor from Ohio University, seniors usually wait several years before pulling the trigger on their bankruptcy, when they should be doing it at the first sign of uncontrollable financial turmoil. Indeed, the sooner a bankruptcy is begun, the less one's finances will get out of control, and the easier and less expensive the process will ultimately be.

Furthermore, one of the best benefits for retirees considering bankruptcy is the fact that their retirement accounts cannot be liquidated in Chapter 7 proceedings in most cases. Under federal law, 401(k) accounts, pensions, profit-sharing plans and IRA's valued up to $1.245 million are exempted -- so, too, are Social Security payments. That means, unlike a lot of people in debt trouble, retirees might be able to keep the vast majority of their assets.

Ohio residents of retirement age who cannot pay their bills may want to consider bankruptcy as a way to reset their finances. If you are in this kind of a situation, an Ohio bankruptcy law firm can assist you with this process.

Source: New York Times, "Bankruptcy Can Help Seniors Protect Assets," Constance Gustke, accessed Jan. 07, 2016

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