Should I File for Bankruptcy After Retirement?
After you have retired, you are most likely living on a fixed income and are relying on Social Security for income, as well as income from a retirement account or pension that you built up during your working life. For many older adults in retirement, the possibility of having to consider bankruptcy due to debt can be devastating, and most seniors want to do everything they can to end up in a situation where they cannot afford to live while paying off substantial and crushing debt. For many elderly Americans, overwhelming debt after retirement results from unexpected medical bills or long-term care, or in some cases, the decision to file for a “gray divorce.”
No matter what the underlying reason for your debt, should you be considering consumer bankruptcy if you have already retired? And is bankruptcy even an option for you? The following are some key pieces of information to keep in mind.
You Might Not Have Any Non-Exempt Assets
First, and most importantly, you should seek advice from an Oak Park bankruptcy attorney who can evaluate your circumstances and provide you with more information about the classification of your assets and debts. If you are living solely off of Social Security benefits, you should know that creditors are not permitted to garnish or attach your accounts in order to collect from your Social Security income. Your Social Security benefits cannot be taken by a creditor. Similarly, necessary household items of modest value, such as your motor vehicle or your home appliances, are typically “judgment proof.” This means a creditor cannot require you to sell these assets in order to pay off debt, even if the creditor gets a judgment against you. The same is true for certain types of retirement accounts.
If all of your assets are judgment proof, filing for bankruptcy might not make too much sense since a creditor cannot take your property or take actions that would have meaningful consequences. However, just because assets may be judgment proof does not mean that a creditor or debt collector cannot keep calling. Indeed, even if your assets cannot be garnished, the law allows creditors to continue contacting you repeatedly within the bounds of the Fair Debt Collection Practices Act (FDCPA).
You Should Make Sure Your Debts are Dischargeable
Some types of debt are not dischargeable in consumer bankruptcy cases. Accordingly, in such situations, it does not matter if you are retired or not—if your debts are not dischargeable, bankruptcy likely is not the best course of action for you. But if you have largely medical debt, credit card debt, or other similar types of debt, you should be able to anticipate that your debts are dischargeable. An experienced bankruptcy attorney can confirm this for you.
Is Your Retirement Income Exempt Under Illinois Law?
For many seniors in and around Oak Park, a majority or even all of their current assets and income would classify as “exempt” under Illinois law and thus would be protected in a Chapter 7 bankruptcy. If this is the case for you, and all of your debts (or the majority of your debts) are dischargeable, bankruptcy may be a great solution for you.
Contact Our Oak Park Bankruptcy Lawyers
If you have questions about whether bankruptcy is the right choice for you, or if you have specific questions about bankruptcy eligibility, one of our Oak Park bankruptcy attorneys can assist you today. Contact the Emerson Law Firm to learn more.
See Related Blog Posts:
Can a Creditor Force Me to Reaffirm Debt After a Bankruptcy Discharge?
If Bankruptcy Law is Changed, Will it Affect My Current Case?
No matter what the underlying reason for your debt, should you be considering consumer bankruptcy if you have already retired? And is bankruptcy even an option for you? The following are some key pieces of information to keep in mind.
You Might Not Have Any Non-Exempt Assets
First, and most importantly, you should seek advice from an Oak Park bankruptcy attorney who can evaluate your circumstances and provide you with more information about the classification of your assets and debts. If you are living solely off of Social Security benefits, you should know that creditors are not permitted to garnish or attach your accounts in order to collect from your Social Security income. Your Social Security benefits cannot be taken by a creditor. Similarly, necessary household items of modest value, such as your motor vehicle or your home appliances, are typically “judgment proof.” This means a creditor cannot require you to sell these assets in order to pay off debt, even if the creditor gets a judgment against you. The same is true for certain types of retirement accounts.
If all of your assets are judgment proof, filing for bankruptcy might not make too much sense since a creditor cannot take your property or take actions that would have meaningful consequences. However, just because assets may be judgment proof does not mean that a creditor or debt collector cannot keep calling. Indeed, even if your assets cannot be garnished, the law allows creditors to continue contacting you repeatedly within the bounds of the Fair Debt Collection Practices Act (FDCPA).
You Should Make Sure Your Debts are Dischargeable
Some types of debt are not dischargeable in consumer bankruptcy cases. Accordingly, in such situations, it does not matter if you are retired or not—if your debts are not dischargeable, bankruptcy likely is not the best course of action for you. But if you have largely medical debt, credit card debt, or other similar types of debt, you should be able to anticipate that your debts are dischargeable. An experienced bankruptcy attorney can confirm this for you.
Is Your Retirement Income Exempt Under Illinois Law?
For many seniors in and around Oak Park, a majority or even all of their current assets and income would classify as “exempt” under Illinois law and thus would be protected in a Chapter 7 bankruptcy. If this is the case for you, and all of your debts (or the majority of your debts) are dischargeable, bankruptcy may be a great solution for you.
Contact Our Oak Park Bankruptcy Lawyers
If you have questions about whether bankruptcy is the right choice for you, or if you have specific questions about bankruptcy eligibility, one of our Oak Park bankruptcy attorneys can assist you today. Contact the Emerson Law Firm to learn more.
See Related Blog Posts:
Can a Creditor Force Me to Reaffirm Debt After a Bankruptcy Discharge?
If Bankruptcy Law is Changed, Will it Affect My Current Case?
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