If you are facing bankruptcy, you have many questions. If you are facing bankruptcy and are over the age of 65, one of those questions might be whether you are too old to file. It is true that your own life circumstances, including your age, can make a big difference in how bankruptcy will affect the financial difficulties you are facing.
However, no one is ever too old to file for bankruptcy. Instead, it is worthwhile to know how your age will impact the bankruptcy process and what the process may look like for you.
Can Seniors File for Bankruptcy?
Anyone can file for bankruptcy regardless of their age. There is no requirement that says people who are over a certain age cannot file. You can file as long as you are considered a legal adult. While some people think they may be too old to file, it is likely because they have heard that doing so may come with certain risks.
Generally speaking, seniors usually have significantly more equity in their homes than younger people. This makes the concept of filing a Chapter 7 bankruptcy very different from someone who is younger and still has several working years ahead of them. Seniors typically have much more to lose if their home is surrendered as part of the bankruptcy agreement. They also have a lower chance of recovering what they have lost than someone that will work for many more years after filing bankruptcy.
However, there are many more factors seniors must consider when deciding whether or not to file bankruptcy. This is even truer in today’s environment. To ensure the right decision is made, it is critical that any senior considering bankruptcy understands the risks and rewards associated with it.
Why Do Some Seniors Not Consider Bankruptcy?
Even when a senior considers bankruptcy briefly, there are reasons they might ultimately decide to use another form of debt relief. Much of the time, it is because seniors are often considered to be ‘judgment proof.’ This means that they simply do not have the assets that can be seized as payment. During the bankruptcy process, the bankruptcy trustee will seize certain assets and sell them to help repay creditors.
However, many of the assets seniors have are exempt from seizure. Certain types of income, such as Social Security benefits, retirement savings, and more cannot be seized during the bankruptcy process. These assets are not only exempt from seizure in bankruptcy cases, but in other types of debt collection, as well. Due to the fact that seniors will not lose these assets in debt collection efforts, there are automatically fewer reasons to choose bankruptcy.
Still, even though many of the assets seniors own are exempt from seizure, that does not mean bankruptcy is never a good option. Today, many seniors remain in the workforce and they have no intention of leaving any time soon. A senior that is still earning an income and has other assets that not exempt from seizure may find that bankruptcy is still a good option. This highlights the need to examine all of the factors related to a case before a senior, or anyone else for that matter, files for bankruptcy.
For example, a senior homeowner that is still working and has non-exempt assets and income may choose not to consider filing bankruptcy. Florida has one of the most generous homestead exemptions of all states, and the Constitution of the State of Florida allows a homeowner to keep their house in most cases, and there often is not even a limit in equity. Still, when a senior has a home and non-exempt assets, their home may be protected but those other assets will not. Another person of the exact same age, though, may have a home but their assets are exempt, so filing for bankruptcy may make more sense for them.
When Should Seniors File Bankruptcy?
It is difficult to say with any degree of certainty whether a person should file bankruptcy or not. Ultimately, a person must consider the impact the bankruptcy and their current debt load is having on their life. Some people do not mind having significant amounts of debt while for others, it is a huge burden. Any time the stress of debt is too much for a person to bear, it may be of benefit to file for bankruptcy, regardless of a person’s age.
It is also worthwhile to note that two of the main types of debt discharged during bankruptcy are medical debt and credit card debt. These are also two of the most common types of debt seniors are likely to incur. Seniors that carry significant medical or credit card debt and want to have it discharged may choose to do so through a bankruptcy filing.
Other Options for Seniors Considering Bankruptcy
Determining whether or not you should file for bankruptcy once you are considered a senior is not an easy choice. You must consider how much equity you have in your home and, if so, if and how Florida’s homestead exemption will affect it. You must also consider the amount of debt you are currently carrying, what type of debt it is, and whether filing for bankruptcy is worthy of the discharge it may bring.
It is difficult to consider all of these factors on your own and determine the impact they will have on your life. A bankruptcy lawyer can advise whether it is the best option for you, or if you have other options available. For example, in many cases, a bankruptcy lawyer can also review your debt before you file to determine if simply defending against it is a better solution.
Call Our Bankruptcy Lawyers in Florida Today
If you are a senior considering bankruptcy and do not know if it is the right choice, our bankruptcy lawyers in Fort Lauderdale are here to help with your case. At Loan Lawyers, we will review the full facts of your case, advise on the impact bankruptcy will have on your life, or if it is worthwhile to defend against your debt. Call us today at 954-807-1361 or fill out our online form to schedule a free consultation with one of our knowledgeable attorneys.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.