Articles Posted in Chapter 7 Bankruptcy

In a recent study by Stetson University College of Law in Pinellas County, Florida soon to be published by the Georgetown Journal on Poverty Law and Policy, entitled The Elderly in Bankruptcy and Health Reform, the most cited reason for financial difficulties of the elderly as reported by Florida attorneys is “credit card debt”. The second most common difficulty cited is “lack of income”. Twenty-five percent of our country’s elderly live at or under the poverty line and over 50% report social security as their sole income.

For the past few decades, the elderly have had multiple sources of income during retirement. Social security, pension and savings formed a three legged stool which supported elderly Americans throughout their retirement. Nowadays though, pensions and savings have often dissipated and only Social Security remains. Not many people can live on Social Security alone and debt quickly starts to accumulate in a day to day struggle to pay the bills.
Many of these same Americans own their homes outright or have other assets. Rather than losing these assets to creditors, filing a bankruptcy may be the best option. As an added bonus it avoids the time consuming, lengthy and often expensive probate process. Most people on a fixed income of social security would easily qualify for a Chapter 7 bankruptcy. In Florida, homes are generally exempt in a bankruptcy as well as 401k, IRAs and annuities. Once a Chapter 7 bankruptcy is completed in three months, the debt owed to credit cards and other unsecured creditors such as hospital bills are fully discharged and no longer owed. No more need to open a probate.