Filing for bankruptcy is nothing to be ashamed of, but too often retirees in dire financial straits will delay filing. According to Deborah Thorne, an associate professor of sociology at Ohio University who has studied older Americans and bankruptcy, some people will even wait years before they file.
These long delays coupled with spending of retirement assets can put older Americans on downward spirals of debt that are much harder to recover from than they could have been, had they declared bankruptcy earlier.
The benefits of bankruptcy are plentiful. It can bring massive relief from debt incurred due to rising medical costs or providing for children, as well as helping protect retirement assets.
Will Bankruptcy Hurt My Retirement Funds?
Retirement income and savings are often completely untouchable by creditors under federal law. This includes pension funds, Social Security payments, 401(k)s and IRAs worth up to $1.245 million. If you are worried that filing for bankruptcy might mean a home foreclosure, you can typically avoid this by getting a homestead exemption.
Your credit score will probably suffer; this is unavoidable. However, your credit can be damaged just as badly by mounting debt. Bankruptcy could be a smart solution to stop the damage now and provide a platform upon which to rebuild.
If you are considering filing for bankruptcy, speak to a dedicated bankruptcy attorney.
Judd Law Firm – Your Gateway to Financial Freedom