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You’re never too old to file bankruptcy

by Dorota Trzeciecka on December 28th, 2009

There is no age limit for filing bankruptcy.  In fact, in the last eight years, the group of Americans 55 and over has become the age group most likely to declare bankruptcy, according to AARP.  This is due to rising healthcare costs and declining home values.  In the past, retirees would have downsized — cash in their homes and pay off their debts.  Or, they would have gotten a reverse mortgage.  But, with declining property values, most seniors don’t have enough equity in their homes to do that.  Some, like their younger counterparts, owe more on their properties than they are worth.  Seniors have also been hit the hardest by the declining economy and high unemployment.  There are less jobs available for retired seniors and less money for them to pay their debt down.

In some cases, bankruptcy may offer a viable solution for seniors, such as in case of large medical and large credit card debts.  In Florida, the seniors get to keep their IRAs and 401(k) retirement savings accounts up to $1,095,000.00, because these are protected from judgments in bankruptcy.  They also get to keep their homes.  Homestead property is protected, including mobile or modular home and condominium. 

In other cases, it may make little sense for debt burdened seniors to file bankruptcy. When seniors have no assets to protect, they can simply walk away from the debt, wait to be sued, and tell the debt collectors to leave them alone. 

If you are a senior considering bankruptcy, speak to a bankruptcy attorney about your options. 

Ms. Trzeciecka has been a licensed attorney since 1996 and is a member in good standing of the Florida Bar and a member of Miami-Dade County Bar Association.  Ms. Trzeciecka practices in the areas of consumer bankruptcy, probate administration, and alternative dispute resolutions.

  • Bob

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  • Maybe I feel this way because I’m a bit naïve and maybe don’t fully understand what bankruptcy is, but isn’t bankruptcy kind of a cop out? Isn’t it better to step back, figure out the situation and try to fix it? I guess I just don’t see how it helps a person..