Blog > 2021 > September > Options for Seniors Struggling With Debt
When you are a senior, you can hope that you will have enough money to retire and live in peace. However, that is not the case for many people. Living on Social Security or even a small retirement does not give you enough to live comfortably. When you are struggling with debt as a senior, you do have some options.
If you have limited income and do not own real estate, you could file Chapter 7 liquidation bankruptcy. You will be able to keep some of your assets, and you might have to sell some. You can get rid of all old credit card debt and medical expenses and start with a clean slate if you file Chapter 7.
When you file Chapter 7, you file a Petition for Bankruptcy and schedules that list all your assets, real estate holdings, and debt, among other things, with the bankruptcy court. The process typically takes two to four months for the average bankruptcy process.
Filing Chapter 13 bankruptcy allows you to “reorganize” your finances. This is ideal if you own property or many valuable assets, such as jewelry, collections, or more than one vehicle. With Chapter 13, you can keep most everything you own, but you must have enough income to pay into a Chapter 13 bankruptcy “plan. ” The plan lists all of your debts according to type. The trustee collects a monthly fee from you and uses most of it to pay debts in order of “importance.”
Creditors cannot garnish certain types of income. Most creditors cannot come after you if you do not own your home or other real estate holdings. Suppose your income comes from Social Security, SSI, the Veterans Administration, Federal Railroad Retirement, the Civil Service Retirement System, or Federal Employee Retirement System. In that case, most creditors cannot garnish that income.
However, if your debt is government debt, such as student loans, or debt for child support, those collection agencies could garnish your income. However, the bank cannot take all your money from your bank account if your payment is directly deposited. It must leave two months’ worth of direct deposits in your account.
For example, if you receive $1,100 from the Veterans Administration each month, the government or child support creditor (usually the state) must leave $2,200 in your account so that you can pay bills and withdraw money.
If you are considering filing bankruptcy to get out of debt, contact a bankruptcy attorney at SM Law Group for a consultation.
If you are looking for ways to get debt-free, don’t hesitate to contact us today through our website or give us a call at to schedule your free consultation.
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