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Does a bankruptcy at 60 mean my life is over?

On Behalf of | May 2, 2023 | Firm News |

If you are a senior citizen living in Indiana and facing financial difficulties, you may wonder if bankruptcy is a viable option for you. Bankruptcy can be a powerful tool to help you get out of debt and start fresh, and you should know that you are not alone, if you need to file for bankruptcy.

Why do seniors need to file for bankruptcy?

Many seniors experience financial problems due to unexpected life events that affect their income, expenses or assets. They rely on fixed incomes from Social Security, pensions or retirement accounts, which may not be enough to cover their living expenses and debt payments.

Additionally, some seniors may face penalties or taxes for withdrawing money from their retirement accounts early or for not taking distributions.

Medical bills

Health care costs are one of the leading causes of bankruptcy for Americans of all ages, but especially for seniors who may have more health issues and need more medications and treatments. Medicare and supplemental insurance may not cover all the expenses, leaving seniors with large out-of-pocket costs.

Divorce and death

Divorce can have a significant impact on the financial situation of seniors, especially if they have been married for a long time and shared assets and debts. Divorce can also affect the eligibility and amount of Social Security benefits, alimony and spousal support.

Losing a spouse can be devastating emotionally and financially for seniors. They may lose income from their spouse’s Social Security benefits, pension or life insurance. They may also have to pay for funeral costs, estate taxes and debts.

Fraud or scams

Seniors are often targeted by fraudsters and scammers who prey on their vulnerability and trust. They may be tricked into giving away their personal information, bank accounts or credit cards, or into investing in fraudulent schemes that promise high returns but end up losing their money.

What are the types of bankruptcy available for seniors?

Each type of bankruptcy has its benefits and disadvantages. Seniors have two options: Chapter 7 and Chapter 13 bankruptcy.