If you have parents who are struggling financially and you are wondering if bankruptcy is a good option for them, we can help. In today’s economy, it is common for adult children to provide financial assistance to their aging parents. Depending on the type of debt your parent has, filing a Chapter 7, Chapter 11, or Chapter 13 bankruptcy case may help your parent get his/her financial life back on track and make your financial assistance no longer necessary.
You may discover that your parent has significantly more credit card debt than he/she will ever be able to repay. Additionally, harassing calls and letters from debt collectors are often distressing to older individuals. If this is the case with your parent, a bankruptcy filing would halt all collection activity and could eliminate all of the credit card debt.
Below are a few additional things you should know when considering a bankruptcy filing for a retired or elderly parent:
- Bankruptcy law provides numerous exemptions that protect certain types of income, such as Social Security benefits. Creditors are prohibited from taking your parent’s Social Security benefits.
- Many forms of retirement benefits are protected by exemptions. Most pensions, 401(k) accounts and IRAs are protected in bankruptcy.
- If your parent owns a home or other real property, he/she must continue to pay the mortgage during the bankruptcy case in order to keep the property. If your parent wants to surrender the home back to the mortgage lender, any deficiency balance left due and owing will be discharged or eliminated in the bankruptcy case.
- Every debtor is required to attend a meeting of creditors, where he/she will answer questions regarding his/her finances. This can be intimidating for senior citizens, but most attorneys and trustees understand the stress involved, and will work with your parent to make it as simple as possible.
Please keep in mind that every bankruptcy matter is different. If you or your parents have questions about filing for bankruptcy protection and would like to schedule a no-cost consultation, please contact our office by completing the form on this website or calling us at (954) 516-2566.