What Senior Citizens Need to Consider Before Filing Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a great way to get your finances together, whether you're 30 or 70. However, for older adults, bankruptcy filing comes with a few complications. Chapter 13 isn't the best option for everyone, and that includes some seniors. If you're over the age of 65, it's important to carefully consider the realities of Chapter 13 before you file.

The Craig Black Law Firm has experience with Chapter 13 bankruptcy filings for seniors. I take a personal approach to each case, working directly with each client. If you're an older adult thinking about filing for Chapter 13, contact me at 678-888-1778 or complete my confidential contact form.

Income Limitations

Chapter 13 sets you up on a repayment plan, which means you'll need to have enough income to make those payments. For seniors depending on Social Security benefits and retirement savings, money can be tight, particularly if inflation outpaces income increases.

The good news is your retirement income is protected under the Employee Retirement Income Security Act. However, there are limits to this, so it's important to look into it before filing. You'll also need to crunch the numbers to ensure that income will cover an extra repayment plan on top of your essential living expenses.

Home Ownership and Equity

Do you own your home outright? Even if you don't, chances are you have a good amount of equity. Chapter 13 bankruptcy is a great way to protect your home while you work toward getting caught up on your past-due payments, but mortgage holders will still need to make monthly payments to stay in a home.

For seniors, though, the stickiest part of home ownership is the equity mentioned above. Equity is considered property, which means the court may have you repay that equity to make things right with creditors. Many states have homestead laws that exempt a certain amount of equity during bankruptcy filings, so you'll need to crunch the numbers and determine how much you stand to lose by filing.

Medical Debt and Health Costs

Healthcare costs are a constant source of financial strain for older adults. Medicare covers some of those costs, but you'll still be paying out of pocket for medications, medical visits, and unexpected ailments. It's important to consider the ongoing cost of healthcare in your budget as you're determining whether you can afford a repayment plan.

Fortunately, you can include existing medical debt in your Chapter 13 repayment plan. This is why the timing of your Chapter 13 filing makes a difference. If you're dealing with a series of upcoming surgeries, you may want to file after you've managed those expenses rather than trying to balance them with a repayment plan.

How the Craig Black Law Firm Can Help

The Craig Black Law Firm has experience with helping seniors navigate the tricky Chapter 13 bankruptcy filing process. If you're an older adult considering bankruptcy, call me at 678-888-1778 or complete this form.