Seniors and BankruptcyWith the rising costs of healthcare and the decreasing amount of medical coverage offered under most insurance plans, many seniors find themselves struggling to pay expensive medical bills.  Further, retired individuals on fixed incomes may find themselves confronted with unexpected medical costs such as long-term care which they struggle to afford.  Increasingly, for those seniors facing this and other insurmountable debt, bankruptcy has become an option.

Medical Expenses

The healthcare costs for age-related medical conditions can be staggering.  For those without significant medical coverage or wealth, the expense of treating major illness and injuries will quickly outpace the patient’s income.  Therefore it is not surprising that in many cases, seniors who are considering bankruptcy are those who have acquired unexpected and considerable medical bills.  Seniors faced with these bills often turn to their credit cards in order to cover their medical fees only to find that they are falling into high-interest debt.  For some, a Chapter 7 bankruptcy offers a way to discharge this kind of debt.  However, bankruptcy will only include debt which exists at the time the bankruptcy is filed.  Therefore a senior who is expecting to incur more medical debt may want to wait before declaring bankruptcy.

Property Ownership

Seniors considering bankruptcy often have concerns about their property and how it will be treated should they choose to file.  For those who own a home or other valuable assets, it will be important to learn which type of bankruptcy allows a filer to retain their home and assets or if an exemption is available for their home and other property.

Retirement and Social Security

Another matter which may concern a senior filer is how their retirement accounts and social security benefit will be affected. Fortunately, in most circumstances, a person’s social security pension benefit and qualified retirement accounts are considered exempt property.  What this means is that the filer’s social security benefit and qualified retirement accounts will not be accessible to creditors to pay the person’s debt leaving the filer free to continue receiving this income.


Filing for bankruptcy will most likely negatively affect a person’s credit score and will remain on their credit for ten years.   Therefore a natural concern is how this will affect the senior filer.  For those who do not plan on acquiring significant assets in this future, this may not be as much of a problem.  However, determining whether the impact to your credit score is worth relieving your debt will largely depend on your circumstances.

Considering bankruptcy is an important decision which should be looked at carefully in view of your situation.  We understand the financial issues faced by today’s seniors and their families and can provide insight and advice to help you consider your options.  Please contact us online or by phone if we may be of assistance.

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