Seniors on fixed incomes often find themselves facing debt troubles. They may have been accustomed to a certain standard of living with great career incomes that they realized too late they would be unable to maintain, or they may have faced personal expenses that they were unprepared for. Whatever the reason, once seniors’ debts exceed their incomes, there are fewer options for digging themselves out of the hole they are in than there are for younger people. This situation forces them to face a difficult choice. They can continue to struggle to keep their heads above water, try some sort of debt settlement, or file for bankruptcy. Bankruptcy will let them keep their retirement funds and pensions as well as all of their other property
Many, especially in the older generations, feel morally bound to pay debts they have incurred, so bankruptcy is a tough option. Debt settlement might be the right choice for some seniors, but they have to be careful as there are many unscrupulous people who could take advantage of them. The best course of action is sometimes unclear, so it is wise to consult a bankruptcy attorney who can give sound legal advice.
Debt settlement is an agreement between one or more credit card and collection companies and a person who owes the debt. The parties agree to reduce the amount owed and often these debts are consolidated into one monthly payment. This can still overtax a senior’s limited income and end up costing them extra in fees or interest. Depending on the plan, they may never get the debt paid off once fees are incorporated, even if the person handling the details is above-board.
Bankruptcy on the other hand, eliminates much, and sometimes all of the debt, leaving seniors with a clean slate. When a senior declares bankruptcy, they are often concerned that their social security or retirement funds will be confiscated to repay the debts they owe; you need to know that social security and retirement funds are untouchable. A Chapter 7 bankruptcy (link to new landing page) for a senior is usually considered a “no asset” bankruptcy because there are few assets and many of those are exempt. The trustee has no assets to sell to pay your creditors if you can exempt everything.
When you find yourself in a debt crisis as a senior citizen, your best option is to contact an experienced bankruptcy lawyer, such as Philadelphia-based William D. Schroeder, Jr., Attorney at Law. He will be able to evaluate your particular situation and offer a solution that best benefits you. Mr. Schroeder has over 30 years of experience with helping Philadelphia area residents find solutions to financial problems, whether it is bankruptcy, debt settlement or another alternative. Contact us today for a consultation or more information.