Milwaukee, WI Bankruptcy Law Blog

Sunday, January 21, 2018

Not So Golden Years

A growing number of people over the age of 65 have been filing for bankruptcy in recent years. In my office, retired folks frequently tell me how embarrassed they are to be considering bankruptcy after making good financial decisions their entire life. I understand, and I can emphasize with them, but I always tell them filing for bankruptcy is nothing to be ashamed of. Bankruptcy is a lifeline that Congress put in place for good reasons.

The vast majority of my older clients are filing for bankruptcy because they have had a medical or family emergency that sunk them. A short hospital stay or emergency surgery can cost thousands of dollars, and it seems like insurance is covering less and less. I am also seeing more grandparents who have stepped up an taken custody of their grandchildren for one reason or another and ended up in serious debt. There is nothing anyone can do to prepare for a surprise event that alters the entire rest of one’s life. And recovery from one of these incidents is what bankruptcy is for. So, there’s no reason to feel bad about taking advantage of the bankruptcy system.

Under the latest bankruptcy rules, many people must file under Chapter 13, which includes a multi-year, court-supervised, repayment plan. Older adults, however, can often still file under Chapter 7, which is a traditional bankruptcy where certain assets are liquidated to pay off as much debt as possible, and remaining debts are forgiven. It’s fast and relatively simple if you have good legal help.

As a reminder, filing under Chapter 7 does not mean that all assets must be forfeited. It is possible to hold on to a house or car while still getting debts wiped away. It is also possible to file for bankruptcy without losing medical benefits. I have worked with enough older clients that I am familiar with how the bankruptcy system meshes with the Medicare and Medicaid systems. I work with my clients to ensure that their benefits are not disrupted while we get their finances straightened out.

No matter their age, nobody should feel bad about taking advantage of the bankruptcy system to get their life back on track.

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| Phone: 414-436-8428

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933 North Mayfair Road, Suite 107, Milwaukee, WI 53226
| Phone: 414-436-8428