Bankruptcy and Retirement – Things to Consider

Many people who are in retirement nevertheless still have significant debt to contend with. Often this debt is driven by medical costs and helping needy family members and not unrestrained spending earlier in life. If the level of debt is manageable of course negotiation is an option but it is important in retirement to do everything possible to protect assets.

Bankruptcy is the ability to hit a financial reset button with respect to debt, yet keep valuable assets while doing so. Many people in their 60s and beyond need bankruptcy relief desperately but are very reluctant to file because of emotional hurdles. People who need bankruptcy in retirement often delay several years or more before actually getting it done. This is wasted time which can hurt not only your finances but your health. Bankruptcy does effect a credit score, but if the situation is so bad that a bankruptcy is necessary, chances are that your credit score isn’t going to be the greatest anyway. Long term, bankruptcy can help your credit score.

Whatever decision a person makes, they should do so after consulting with a qualified and experienced bankruptcy lawyer. Older citizens are often reluctant to go see a lawyer for fear of being judged or ignored. A decent lawyer will not pressure you to file and will listen to your specific situation before advising you.

One of the things to advise you on would be the possibility of settling your debts without filing a bankruptcy. In certain circumstances this can make sense for people. The key for retirement planning and bankruptcy is however, to preserve the assets and income stream you will need to live a decent life. That is entirely possible in bankruptcy because social security and pension income is exempt and in Colorado older citizens get a higher homestead exemption. The definition of “elderly” people who get more exemptions in bankruptcy is actually only 60 years of age.

I wrote this blog because I am continually helping retired people file bankruptcy cases and see many situations where the idea of bankruptcy should have been considered much, much sooner. I see people who have spent down retirement savings in a futile effort to keep things afloat. I see people who are extremely upset and who wrongly think they will be judged by a bankruptcy lawyer or by the bankruptcy courts….I see people filing on credit cards who have repaid the amount they borrowed many times owing to late fees and interest.

Guess what? No one cares. That’s right. No one cares. The bankruptcy trustees and the Courts get paperwork that explains your situation and the necessity of bankruptcy. When you go to your court hearing with your lawyer you sit in a room full of other people who are filing. Everyone is kind, and everyone is non -judgmental. Your lawyer is there in the event it doesn’t go that way for some reason. It is a public record but your neighbors won’t know and won’t care to know. You will not have to explain yourself or be embarrassed. You ought not live the rest of your life in a failing effort to impress people you don’t know and who do not really care about you.

You know who will notice? Who will care? Your family and friends. They will notice you are more relaxed and have more hope. You cannot help anyone if you are sick or dead, and sadly emotional hurdles or feelings of “failure” prevent people from seeking the help they need. You want to leave the assets you have worked so hard for to your family members, not bills. We can do this together.

We can get to a place where your assets are protected and you have a solid plan to protect and nurture the assets you have worked so hard for. We can get to a place where you can help family again and enjoy life. If a bankruptcy is NOT necessary, we can talk about other alternatives as well.

I enjoy this process because people who are in their later years often are the most deserving of bankruptcy relief and a fresh start. Not only do they deserve help from the bankruptcy system, they also tend to benefit the most from a fresh start health and lifestyle wise.

If you are a retired Coloradan and want to take an honest, non judgmental look at your situation please call today for a consultation. Robert Gauss 303 501 4028.

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