Over 60 and in Financial Peril? Read This Post.

Many people over 60 grew up with Puritan values, such as hard work and limited government. In terms of personal finances, these values mean pull your own weight and, if things go wrong, don’t expect a government bailout. Therefore, many people in this age group are extremely reluctant to file bankruptcy, even if there’s no other way out of their financial problems.

A good Chicago bankruptcy lawyer understands the psychological and emotional aspects of government-sponsored debt relief programs. First, in most cases, filers need to be reminded that their financial problems are not their fault. For example, high medical bills force many people over 60 into bankruptcy. Second, this government-sponsored debt relief program is already available. There’s no reason not to take advantage of it.

Kinds of Bankruptcy

Most consumers over 60 file Chapter 7 or, less commonly, Chapter 13 bankruptcy. These kinds of bankruptcy address different debt needs.

Chapter 7 discharges (forgives) most unsecured debts in as little as six months. Some dischargeable unsecured debts include:

• Medical bills,
• Payday loans,
• Credit card bills,
• Most signature loans, such as SBA loans, and
• Revolving debt accounts, such as furniture store credit card debt.

Most government-affiliated debts, such as student loans, back taxes, and FSOs (family support obligations, like child support) are either nondischargeable or only dischargeable in certain situations.

Incidentally, debt discharge doesn’t magically cause debt to disappear. Rather, discharge ends the legal obligation to repay a debt. If a creditor put a lien on Joe’s property, bankruptcy doesn’t affect the lien, even if bankruptcy discharges the underlying debt.

Chapter 13 gives distressed debtors up to five years to catch up on delinquent secured debt obligations, such as HELOC payments and car payments. Chapter 13 also eliminates most unsecured debts, as outlined above.

The qualifications are basically the same for both kinds of bankruptcy. The main qualification is a limited income. A Chicago bankruptcy lawyer can evaluate your case and determine your ability to file bankruptcy.

Bankruptcy Protections

We discussed debt discharge, a key bankruptcy protection, above. Others include the Automatic Stay and asset exemption.

Section 362 of the Bankruptcy Code puts an immediate halt to most adverse creditor actions. Many people over 60 file bankruptcy because a medical bill creditor, usually a debt buyer, is taking them to court. Medical creditors are extremely aggressive and quickly take legal action, especially if the debt is larger than about $10,000.

The Automatic Stay also stops creditor harassment, another favorite debt buyer tactic, repossession, foreclosure, and eviction.

Furthermore, unless debtors file bankruptcy, creditors can usually liquidate their assets to pay their debts. Some bankruptcy exemptions which are near and dear to the hearts of people over 60 include retirement accounts, government benefits, and home equity.

All earned retirement accounts and all government benefits are 100 percent exempt. This exemption is significant. Usually, cash in a bank account is extremely vulnerable. Additionally, savings accounts and Social Security benefits often have emotional values that exceed their financial values.

Illinois’ homestead exemption has a low value ceiling that, on its face, may not protect home equity. However, a number of loopholes are available. Determining the home’s bankruptcy value is a good example. The bankruptcy value is often much lower than the fair market value. This difference changes the home equity determination.

 Work With a Savvy Cook County Lawyer

No matter what kind of financial problem you are having, bankruptcy could be a way out. For a free consultation with an experienced bankruptcy attorney in Chicago, contact the Bentz Holguin Law Firm, LLC. We routinely handle matters throughout the Prairie State.

Source:

udel.edu/dssep/tools_hist/hist-puritans.htm