A person is never too old to make a fresh start when it comes to their
personal finance. A growing number of older Californians are turning to
bankruptcy to give them some breathing room in their golden years. According to an
article by fool.com, financially responsible older Americans often view bankrupt
as a prudent option with ever-increasing amounts of medical, credit card
debt. In some cases, baby boomers who long to retire took on student loan
responsibilities by co-signing with a child. In terms of statistics, 20
percent of total bankruptcy filings are attributed to people 55 and older.
A study by debt.org points out gray bankruptcies have doubled since 1994.
So, what are some of the factors that play into a bankruptcy in later life?
Getting a grasp on medical bills
Medical bills often plague retirees. As a retiree, you might assume Medicare
will protect your finances. But there are a lot of gaps as Medicare does
not cover long-term care and certain other medical expenses such as hearing
aids. Also, many seniors can't keep up with the deductibles and copays
as well as coinsurance costs. People over the age of 65 account for 34
percent of prescription drug usage, which is also an expensive dilemma.
Personal finance experts recommend older adults use an emergency fund,
but 32 percent of aspiring retires between the ages of 53 and 62 have
no money in a rainy-day account.
Collecting social security during a bankruptcy
Many older people have the misconception that they can't declare bankruptcy
if they also receive social security. But receiving income from social
security does not stop you from filing Chapter 7 or Chapter 13 bankruptcies.
If you opt for Chapter 7, you discharge most or all of your debts but
that could mean giving up some property. It's critical to talk to
a bankruptcy attorney in Southern California to decide what works best
for you. With Chapter 13, people often get to keep their debt and keep
their assets. However, it's difficult to pay back a plan if your only
income is social security income.
If you want to retire with peace of mind, consider all of your options.
At the Law Offices of James C. Shields, our clients come first. We specialize
in bankruptcy, estate planning and probate. For more information about
receiving legal support and bankruptcy advice in Los Angeles and Orange
County, California, please