Should Retirees File for Bankruptcy?

Whether you recently retired or you have been retired for quite some time, there are a variety of reasons that you may be struggling to pay off debt. For some retirees, planning ahead for retirement did not take into account all of the expenditures that would occur during retirement, and credit card debt can rise. For many people in retirement, unexpected medical bills can result in a significant amount of medical debt that may feel almost impossible to manage on a fixed retirement income. If you are in a situation where you are retired but you do not know how you can manage your debt, you might be thinking about the possibility of consumer bankruptcy. Should retirees file for bankruptcy? There is no single answer to that question, and it will be important to consider the particular facts of your case with an Oak Park bankruptcy lawyer.

In the meantime, the following are some factors that you should consider when deciding whether you may want to file for personal bankruptcy in retirement.

Are You Eligible for Consumer Bankruptcy?

First, what type of consumer bankruptcy are you planning to file for, and are you eligible? Just like adults who have not yet retired, retirees must be able to pass the means test in order to be eligible for Chapter 7 bankruptcy, or they must be able to show that they can adhere to the terms of a repayment plan if they are planning to file for Chapter 13 bankruptcy. Bankruptcy eligibility can be complicated, so it is important to discuss your circumstances with a bankruptcy attorney in Oak Park who can help.

Are Your Debts Dischargeable?

If you are eligible for bankruptcy, you will next want to determine whether the debts you are struggling to repay are dischargeable. Many debts can be discharged in a bankruptcy case, including credit card debt and medical debt, but some types of debt cannot be discharged under the U.S. Bankruptcy Code.

Do You Have Assets That a Creditor Can Take?

Finally, does it make sense for you to file for bankruptcy if creditors or debt collectors cannot actually come after your assets? In other words, do you even have any assets that a creditor can take? You should know that creditors cannot take assets that are necessary to live, including Social Security benefits and certain retirement assets. If your assets cannot be taken through a judgment, it might not make sense to go through the bankruptcy process.

However, if you do decide to file for bankruptcy, you should know that most retirement assets, including pensions and other retirement accounts, are exempt. As such, they will not be liquidated if you file for Chapter 7 bankruptcy.

Seek Advice From an Oak Park Bankruptcy Attorney Today

If you are currently in retirement but are struggling with debt—whether it is credit card debt, medical debt, or another form of debt—one of our experienced Oak Park consumer bankruptcy attorneys can speak with you today about your options. For some retirees, it does ultimately make sense to file for bankruptcy, but for others, you may not need to file for bankruptcy to protect the assets you are worried about. Our firm can say more. Contact the Emerson Law Firm today to learn more about bankruptcy during retirement and how we can help you with your bankruptcy concerns.


See Related Blog Posts:

Are All Debts Treated the Same in a Consumer Bankruptcy Case?

Why Do I Need Bankruptcy Exemptions if I am Filing for Chapter 13 Bankruptcy?

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