With the economy still languishing, senior citizens have also increasingly turned to bankruptcy to solve their credit card debt problems. When these seniors’ social security and income investments no longer can pay for the minimum monthly payment, bankruptcy often provides the solution they need.
However, many senior citizens fear seeking out information on bankruptcy because in past eras bankruptcy came with a social stigma. Sometimes these seniors believe that financial problems are private, and feel shame in seeking professional help from attorneys. However, bankruptcy has been a legitimate legal tool to help people burdened by debt get relief from obligations that they will never be able to pay. This means that bankruptcy can relief the stress from not being able to pay off debt. These considerations are especially important when an individual is on a fixed income and has little wiggle room to make more payments in the future.
Other seniors may fear that bankruptcy will interfere with their social security or benefits money. However, these assets are usually safe. Bankruptcy trustees may not levy social security, pensions, or retirement plans unless the debt in question is from student loans, child support, or federal taxes. There are also some exceptions for lump sum payments received through social security disability.
In most cases social security is also not counted as income for the purposes of determining Chapter 7 bankruptcy. This type of bankruptcy is often the most useful for senior citizens and others with fixed income who may not be able to make Chapter 13 repayments.