Getting through a Bankruptcy as a Senior Guide

Senior citizens around the country are beginning to pursue what is becoming a nationwide trend through the filing of bankruptcy. According to the findings of numerous studies and analysis, the filing of bankruptcy by seniors and retirees is reaching an all time high.Find more info read this

The explanation for this is that right now the economy is not particularly strong, and seniors are the usual individuals who live on a fixed income. The sum of that fixed income does not keep pace with the rate of inflation as inflation happens year after year. Health insurance premiums have passed through the roof to compound this issue, and some pension schemes have started to place limits on retired workers’ health care benefits, and some corporations have sought to cut the benefit entirely.

Senior Americans are being increasingly consumed by debt and financial commitments, more now than ever. As a consequence of this, one of the sad findings is that after being part of the work force for 30, 40 years or more, now is the time when seniors should be able to sit back and enjoy life, but for many, that’s not the reality they face. One estimate suggests that about 22 percent of those filing for bankruptcy are accounted for by people aged 55 and over.

There are many reasons why this dilemma is faced by seniors, and many of these things are not relegated to seniors. There is the skyrocketing cost of health insurance that often requires prescription medications, and sadly, as individuals advance in years, these are frequently used. Credit cards are used for other needs, such as food and clothes. A willingness to support their children who may be financially struggling also plays a part. The unreasonable expectations of what compensation their pensions would generate, the benefits (or lack thereof) provided in their pensions, and the degree to which Social Security plays a minor role in their income are also a major factor.

One way many seniors have sought temporary relief from this issue is to accept the credit card deals that seem to come in the mail every day by the truckload. They get the credit cards out of desperation, bill them to the hilt, and then the process is repeated until it becomes a house of cards, which falls loudly, while in the same situation next month. With the high interest rates paid by many of these credit cards, they are as vulnerable as anyone else, as they see their savings erode even more rapidly.

Bankruptcy Law – What You Need To Know

It was fairly easy to file for bankruptcy until just a few years ago. Not anymore anymore. In 2005, after Congress changed the country’s bankruptcy rules, many debtors discovered that the new “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,” was more an obstacle than helping to overcome past failures and begin again.Checkout Attorney Harry C Kaufman for more info.

The new legislation is tighter, with more criteria than ever before. It is important for someone contemplating bankruptcy to recognize the following:

Counseling for Credit:

If you apply for Chapter 7 bankruptcy that discharges your debt or Chapter 13 bankruptcy that enters you into a creditors’ repayment plan, anyone filing for bankruptcy is required by statute to attend credit counseling by a court-approved counseling service.

Filings of Chapter 7:

Under the new rule, your right to file for Chapter 7 bankruptcy is no longer yours. If the court finds that you make more than the average income within your state after proving your income, you will be allowed to file Chapter 13 bankruptcy instead and enter a repayment schedule to repay all (or most) of your creditors.

Section Thirteen:

It is not unusual to find your repayment plan a little more than under a Chapter 13 filing you can handle financially. The sums that you have to repay per month are measured according to specialized guidelines that take your last year’s income (not what you now make) and your assets into account.

Residency: Residency:

Although federal bankruptcy laws must be met for all, some states offer their own, more lenient exemptions. However, in order to apply for any state exemptions, the new federal legislation requires citizens to live in a particular state for a defined amount of time (usually at least two years).

Expenses Allowable:

In the past, bankruptcy filers could effectively remove their debt and start anew in seven years, while continuing to enjoy the lifestyle they had become accustomed to. That isn’t the case anymore.

The IRS sets your monthly spending, and what you should be able to repay, under new federal bankruptcy laws. Many are restricted from providing expenses for mobile phones as well as cable TV, high-speed Internet access, movies, family meals, and everything else outside the IRS and courts’ minimum permissible expenses.