Older Americans mired in debt face many concerns. They want to retire but worry about burdening family members with extra financial obligations. For example, they do not want to force their children or grandchildren to support them when they can no longer work.
According to the American Association of Retired Persons (AARP), the years before 2020 saw an increase in seniors filing for bankruptcy. AARP expects this trend to continue, but is bankruptcy the best option for debt-strapped seniors? It depends on the goals you want to achieve and the types of debts you have.
When is bankruptcy a good option?
The concerns that seniors in debt typically have include the following.
- How to retire
- How to hang on to the family home
- How to leave an inheritance for family
- How to stop creditor harassment
- How to reduce financial burdens for family
A Chapter 13 bankruptcy may help you achieve the goals above. In many cases, you can keep your home and arrange to leave something for your family after you die.
Filing for bankruptcy may also protect your retirement by allowing you to get rid of some debt (like credit card debt and medical bills). In turn, this empowers you to save more for your retirement years. Bankruptcy may also protect up to $1.36 million in individual retirement accounts (IRAs).
As you can see, bankruptcy can help you protect yourself and your family members. However, it cannot wipe out student loan debt or most tax debt. If you are unsure whether filing can meet your needs as an older American, consider learning more about bankruptcy in our state.