Bankruptcy and Seniors in Massachusetts
The rate of bankruptcy filings is up for Seniors – those over 65 in the US. According to the AARP, the rate was up dramatically between 1991 and 2007, for example. And, the rate among Seniors over 75 was up more than twice the rate in that time frame, over 400%! Much of the debt was medical of funeral expenses.
Mortgages, Seniors and Bankruptcy
Many Seniors still have mortgages. They can be expensive without an income from work. And when other unexpected expenses occur. When one spouse dies, there is less Social Security for the mortgage payment. Savings often runs out before mortgages are paid off.
Reverse mortgages sometimes work wonderfully. Sometimes they backfire. They are not the first choice for a sound financial plan.
Seniors Living Off Credit Cards
Many Seniors live off credit cards out of necessity. They simply use credit cards for expenses and pay the minimum payments to get by. Sometimes this works, sometimes it does not. A University of Michigan study found that 66% of Seniors who file for personal bankruptcy protection said it was because of credit cards.
Living on fixed incomes, and relying on credit cards, many Seniors get into financial troubles because they are late on their payments. Late payments, as we all know, often trigger fees, higher interest rates, and the emotional exhaustion in trying to fix the impossible. Often those fees are as high as 30%, and there is no catching up.
Is There A Stigma in Filing for Personal Bankruptcy?
There shouldn’t be. The current president of the US filed. Several times. Other politicians (including Abe Lincoln), movie stars (Walt Disney, Jerry Lewis), the inventor of the assembly line, Henry Ford, and of course a host of sports heroes have too.
Besides, while famous people get headlines when they file for bankruptcy protection, let’s be realistic, most Seniors wont! Further, most Seniors don’t need to worry about their credit scores as they are not buying new houses, refinancing mortgages, or even needing new cars.
And, while there is clearly a public record, you don’t have to tell anybody!
How About Dealing With Adult Children?
Embarrassing? Perhaps, but if Seniors can confront the issue, discharge their debts and get the “fresh start” guaranteed by the law, they can avoid the following: after death the kids, and grand kids, expecting something from the sale of the home, find out that all the equity is now reserved for the creditors.
Remember, in Massachusetts there is significant protection for your home under the Homestead Act.
Bankruptcy Planning for Seniors
Retaining an experienced bankruptcy lawyer could enable you to make a plan that can significantly enhance your financial life, and in tern, perhaps your whole life. As described above, a Homestead could save your home. A properly filed personal bankruptcy can discharge all credit card debt. You can save your car, your personal property, and your IRA, ROTH IRA, 401k, 403b and other pension plans.
Call an experienced personal bankruptcy attorney Neil Burns. You will get a free consultation and knowledge of an attorney who has been practicing law since 1985. Call today for a free consultation.