We have seen more seniors filing bankruptcy since the last recession. In many cases the fixed income of Todd’s senior clients has not been sufficient to pay their monthly expenses and credit card bills. In some of these cases Chapter 7 bankruptcy has been the answer.
Means Test Qualification
Since the Bankruptcy Code was amended by Congress in 2005 all Chapter 7 debtors must achieve Means Test Qualification to file. This test screens out high income filers. Fortunately, social security payments are not counted as income for Means Test purposes. In some cases we can suggest adjustments, such as timing, that assist in achieving qualification.
If you qualify for Chapter 7 the benefit to you can be very significant. Debtors can cancel large amounts of pre-bankruptcy debt in the Chapter 7 Discharge and get a fresh start! This includes: medical debt, hospital debt, credit card balances, personal loans, unsecured bank loans, and deficiency balances on mortgages and vehicle loans. Some types of debt can not be cancelled in Chapter 7. This includes certain types of tax debt, and alimony obligations. In most of our senior cases our clients are able to keep all of their assets. Even in bankruptcy you may keep your residence, retirement accounts (such as 401(k)s and IRAs), whole life insurance, annuities, some equity in your vehicle, and up to $ 5,000.00 of miscellaneous personal property ($ 10,000.00 in a joint case with your spouse).
We have experience helping senior citizens and encourage you to call Todd with your questions.