Bankruptcy for senior citizens and retirees is a sensitive issue, and they should know their options to make a well-informed decision. While seniors can file for bankruptcy, they should do it with legal guidance from a reputable and reliable Florida bankruptcy lawyer. Senior citizens filing bankruptcy should understand what it can or cannot do for them. Problems related to retirement funds, Social Security, and homeownership may arise for a senior that Chapter 7 or Chapter 13 Florida bankruptcy can solve. In some cases, seniors may not need to file for bankruptcy to protect their assets and income. This article will explore bankruptcy for seniors and discuss when and what type of bankruptcy is appropriate for seniors in dire straits financially.
Bankruptcy and Senior Citizens – Protecting Your Home
If you have substantial home equity not covered by a Florida homestead exemption, a trustee in a Chapter 7 bankruptcy can sell your home to pay off the creditors. Seniors are often at a greater risk of losing their homes because many of them have a significant amount of home equity or no mortgage payment. A Chapter 13 bankruptcy allows you to keep your home provided you continue making timely mortgage payments. Chapter 13 also has a provision to help you pay off any mortgage arrears.
Bankruptcy and Retirement Accounts
Retirement accounts are a vital asset for many seniors to finance their golden years. Bankruptcy will protect most types of retirement accounts. A Chapter 7 bankruptcy will protect nearly all types of tax-exempt retirement accounts, including 401k, 403b, IRA, defined benefit plans, profit-sharing, and money purchase plans. The exemption amount has almost no limits. This fact means a senior can exempt the full amount held in the account. The sole exception includes traditional and Roth IRA accounts, which are exempt up to $1,245,475 in total. In Chapter 13 bankruptcy, you keep all your assets, which means all retirement accounts will remain safe.
Bankruptcy and Social Security Income
In the case of Chapter 7 bankruptcy for senior citizens, income received from Social Security or Social Security Disability (SSD) isn’t subject to seizure. This income also isn’t included in the Chapter 7 means test. Therefore, if a large part of your income comes from Social Security, you might qualify for a Chapter 7 bankruptcy. However, Chapter 13 bankruptcy includes Social Security income when determining the monthly amount you will pay through your debt repayment plan.
Protecting Senior Income Without Bankruptcy
Seniors with little or no other income except Social Security and who do not have much property may be able to protect their income and assets even if they do not file for bankruptcy. For instance, as a senior, if you do not have any home equity or do not own a home, jewelry, expensive automobile, or any other high-value assets, then creditors will not have anything substantial to take from you. Florida law protects your essentials, such as personal clothes, furnishings, and some amount of equity in a car.
Safeguard Your Finances With a Florida Bankruptcy Lawyer
Are you a senior considering bankruptcy, but you don’t know if that is the right option or you? Enlist the services of an experienced and professional bankruptcy attorney in Florida. The expert team at the Law Offices of Patrick L. Cordero has over 30 years of experience in bankruptcy. We can evaluate your situation and help you select the right bankruptcy method to secure your financial future. Call us today at 305-445-4855 or contact us online for an appointment. There are many attorneys out there that deal with bankruptcy, but with Patrick Cordero, you will be hiring someone who cares about you and your financial well-being.