Just because a relative is older and living on a fixed income does not mean that he is also debt-free. A surprising number older Americans struggle each month to pay unsecured debts with modest incomes. The most common forms of unsecured debts are credit cards and medical expenses, and for many of our elderly even a small unsecured debt can cause tremendous stress. Some face the difficult decision to cut back on food, prescription medicine, or home utilities in order to make minimum payments on such obligations.
It is not uncommon for the elderly to try to avoid bankruptcy based upon the belief that they can pay their obligations with minimum monthly payments. The unfortunate truth is that it takes many years to pay off even a small high interest debt with minimum monthly payments. Meanwhile, a variable interest rate and annual fees can cause that minimum payment to increase. Moreover, overlooked payments may lead to creditor harassment or lawsuits that can result in a real estate judgment lien or some other complication.
Discussing personal bankruptcy with an older loved one can be challenging. Oftentimes there is concern over losing property or income. The federal bankruptcy laws have changed significantly over the past fifty years and offer protections for the elderly. For example, retirement income and social security are protected from creditor garnishment during bankruptcy. Generally, all of the bankruptcy debtor’s property will be protected, however, the attorneys at Miller and Miller can discuss any property that may be at risk. The bankruptcy laws offer many options for retaining property and discharging debts. After the typical case the unsecured debts are discharged (eliminated) and there is more money available to pay necessary living expenses.
Another common concern is the embarrassment of bankruptcy. Generally, a personal bankruptcy is a private legal process. Friends and family will not be contacted and bankruptcy filings are not published in the newspaper. Only creditors and co-debtors receive notice of a personal bankruptcy.
If an older relative is struggling with debt, call Miller and Miller today for a free consultation so that your loved one can learn about their options. The federal bankruptcy laws contain many protections that protect the assets and incomes of the elderly while discharging burdensome creditors.
Don’t let the stress of credit cards and medical bills ruin your loved one’s golden years.
