Senior Citizen Bankruptcy for Arizona Residents
As you grow older, you want some peacefulness and the knowledge that you’ve worked hard in order to enjoy financial stability in the years to come. Things don’t always go according to plan, however. Statistics suggest that bankruptcy filings among the elderly are on the rise.
The Consumer Bankruptcy Project reported in 2018 that the rate of bankruptcy among those aged 75 or older has tripled since 1991. For those in the 65 to 74 age range, bankruptcy filings have increased by over 200 percent in the same period.
While elderly Americans represent a small percentage of those doing the bankruptcy filing, the statistics are troublesome and they can’t be explained 100 percent by an aging population.
If you’re in your 60s or 70s and you’re wondering whether the bankruptcy is the answer to your financial problems, you should take a few essentials in consideration.
When Is Bankruptcy a Good Idea?
A bankruptcy can wipe out your debt but it’s not always the best choice.
If you do not possess anything that a creditor can take from you, a bankruptcy filing is not going to make sense. In Arizona, creditors cannot take the things needed to maintain your home, social security funds and specific retirement accounts. In case these are all of your financial resources, you should not be making bankruptcy your main way out.
In case you have too many assets, Chapter 7 liquidation bankruptcies are not going to be a good choice. If you do a Chapter 13 filing in such instances, the sum you’ll have to pay back could be significant. Thus, you will have to do the math and examine your assets to determine whether you’re going to gain from the bankruptcy or not.
Instances in Which Bankruptcy Filings Make Sense
Some senior citizens are not going to benefit from bankruptcy. In fact, they could lose a lot by triggering the procedure. For others, however, the bankruptcy discharge could be the key to regaining financial stability.
People who have accumulated significant medical debt should definitely consider a Chapter 7 filing. Medical bills rank among the easiest types of debt to wipe out due to the fact they’re unsecured.
Those who have a very low monthly income may also want to consider a Chapter 7 Arizona filing. One of the requirements for a Chapter 7 filing is falling beneath the median income for the state. In case your income is this low, you should definitely explore the possibility.
Having very low equity in a home can also justify the bankruptcy filing. Some home equity is protected by the Arizona bankruptcy exemption. A large and expensive home, however, isn’t. Seniors are more at risk of losing their home in bankruptcy proceedings because they’ve accumulated more equity and they’ve typically paid out the mortgage.
Click here for more information on bankruptcy and the elderly.
Do the Math!
Before you begin using your retirement money to pay off debt, you should see an Arizona bankruptcy attorney.
Often, Arizona seniors will turn to a legal professional only after they’ve depleted a retirement account and they’re clueless about the right direction. Don’t let yourself lose the hard-earned money that’s supposed to finance your golden years. Do the math in advance and explore alternatives.
Retirement accounts are mostly protected by Arizona and federal law. This is why you should never succumb to pressure or threats coming from creditors. A single consultation with a legal professional can end up saving you a lot of money in the long-run, which is why you shouldn’t attempt to handle the situation on your own.