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How Bankruptcy Helps Seniors Enjoy Their Golden Years

Posted By admin || 3-Feb-2010

Bankruptcy and Seniors

Rising inflation and stagnant pensions and retirement incomes are leaving many senior citizens vulnerable to financial troubles.  More senior citizens are facing foreclosure, loan defaults on credit cards and significant reductions in their standard of living.  The result is that many more are deciding to file bankruptcy so that they can survive and thrive in their golden years.  According to the AARP, senior citizens 65 and over who filed bankruptcy is now the fastest growing segment of people filing for bankruptcy.  The rate of bankruptcy filings amongst this group grew by 125 percent from 1991 to 2007.  And the rate of seniors who filed bankruptcy between the age 75 and 84 increased by 433 percent.   So why is it that more senior citizens are filing bankruptcy?

  1. Bankruptcy can help them save their home from foreclosure.  Many seniors citizens have spent a lifetime paying the mortgage on their home so that they could have someplace to live (debt free) in their golden years.  However, many are at risk of losing their home to foreclosure because of lost pensions (due to a company bankruptcy) or retirement income that does not pay for as much as they had hoped it would.
  2. Bankruptcy protects retirement accounts and social security payments.  Retirement accounts and social security payments are exempt from creditor seizure during bankruptcy.
  3. Bankruptcy frees up more income so that they can pay for the things that are most important.  By discharging debt obligations, bankruptcy allows seniors to redirect their income to more important things such as medical supplies and everyday expenses.
  4. Bankruptcy reduces stress.  As any senior knows, creditor calls and letters can be stressful. Bankruptcy stops all creditor contact, allowing seniors to live out their golden years free from debt-related stress.
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