Bad Advice About Bankruptcy and Retirement
Unlike past generations many Americans are entering their golden years with mountains of debt. Today we have a new class of retired debtors who are struggling with underwater mortgages, delinquent credit card bills and medical debt as they enter their sixties. These retired debtors are looking for help; but many so-called financial gurus have nothing to offer other than bad advice.
Let’s take a look at a few of the bad suggestions given to debtors entering their retirement years:
- The number one piece of bad advice that debtors entering or near retirement are given, is to avoid filing bankruptcy. Why? Because many so-called financial gurus have an irrational disdain for bankruptcy, although some of them have admitted to filing bankruptcy themselves. No one can really say whether it is definitely a good/bad idea for another person to file bankruptcy until they take a look at their financial situation. Retired and nearly retired debtors should be careful about who they ask for bankruptcy advice. Unless that person is a bankruptcy attorney they really do not understand how the bankruptcy law can help or not help any particular debtor.
- The second piece of bad advice given to retired and nearly retired debtors is to cash out their retirement savings and use it to pay for debts. This particular piece of advice is almost criminal because it jeopardizes the future financial well-being of debtors who won’t have time to replenish their retirement accounts. If a debtor is so swamped with debt that they need to drain their retirement savings to pay those debts, then they should probably consider filing bankruptcy. Bankruptcy can discharge their debts and protect their retirement savings from creditors.
The final piece of bad advice is the suggestion that retired and nearly retired individuals facing debts and considering bankruptcy should just simply go back to work and pay off their debts. However, these self-proclaimed bankruptcy opponents never seem to consider the fact that it is very difficult for retired and nearly retired individuals to enter into “high-powered and high-paid” careers because many employers are hesitant to hire older workers.