Retirement. The golden years. Relaxing on the porch, visiting with neighbors and family, telling stories to the grandchildren about the good old days. These are promises towards which Alabama residents spend a lifetime working. However, given struggles with credit card debt and other debts, some seniors may need to consider filing for bankruptcy as a way to protect themselves in their retirement.
The amount of debt held by senior citizens grew by 83 percent between 2001 and 2010, up to an average of $50,000. A great deal of this is a result of loans seniors took out against their homes before the financial collapse of 2008. Whether it was to pay for repairs to the house, vacations, help family members or even invest in the stock market, those loans continue to plague seniors today.
Credit card debt is another major element in addition to mortgage debt. One in three seniors today actually relies on credit cards just to make ends meet when Social Security payments fall short. Without earning income, one financial analyst observed, it is hard to see how seniors will pay off these debts.
The fact is that many seniors simply cannot pay off the debts they have acquired late in their lives, whether mortgage debt or credit card debt. In a situation like this, Alabama seniors may begin to wonder whether they will lose their homes, their cars or other assets. Those who want to take action may worry about falling prey to some “get out of debt fast” scheme advertised on television or on the radio.
Filing for bankruptcy may not be what many seniors would have seen themselves doing at this point in their lives, but the more they learn about it the better they may understand its benefits. Chapter 7 bankruptcy can keep the family home out of foreclosure and automatically stay collection attempts, including attempts to repossess property. Credit card debt, medical expenses and other loans all can be discharged in Chapter 7 bankruptcy.
Bankruptcy can provide a fresh financial start to those who need it most. It is important, however, that Alabama residents considering filing for bankruptcy consult with a legal professional prior to taking any action.
Source: CNN Money, “Senior citizens struggle with mounting debt,” Tami Luhby, May 28, 2013