Senior Citizens and Chapter 7 Bankruptcy

It used to be that people grew up, got jobs, raised families and happily retired. If you are like many older residents in Chicagoland, life has gotten more complicated than that. Your savings and Social Security payments may not be enough to cover your needs. Our team at Benjamin Brand, LLP, has the experience to assist clients when bankruptcy becomes the best option to get out from underneath overwhelming debt.

For most seniors living in Chicago’s Lower West Side, Near West Side, East Garfield Park and West Town, bankruptcy is not one of the first options considered. However, according to the Washington Post, increased health care costs and reduced income result in more Americans filing for bankruptcy than ever before. It can help eliminate debt and provide protection from creditors so that they cannot seize personal assets or garnish wages.

Protection Under Chapter 7 Bankruptcy

Medical debt is one of the primary reasons people 65 and older file for bankruptcy. Chapter 7 can significantly decrease the amount due and help make payment plans manageable. Most retirees depend on retirement accounts throughout the golden years.  Federal law protects the following types of accounts from creditors:

  • Profit sharing plans
  • IRA’s
  • 402(b)s
  • 401(k)s
  • Defined benefit plans

Social Security income is also protected under Chapter 7. While not everyone who files for bankruptcy qualifies, if the bulk of your funds come from SSI, you likely will.

Alternatives to Bankruptcy

Bankruptcy can cause a lot of changes in your life. Take the time to explore alternatives, such as interest debt reduction, deferment of debt and renegotiation of secured loans to find out if they can provide enough relief. If it looks like Chapter 7 is your best option, retaining an attorney can help ensure the process goes smoothly.

You worked hard to get to your golden years. Filing for bankruptcy in Illinois can help protect your home, vehicle and other assets, lifting a heavy financial burden from your family. Visit our webpage or call us at 312.853.3100 to schedule an appointment.

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