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Being
elderly, living on a fixed income, and dealing with mounting debt can be
frightening. Although retirement funds,
pensions and social security checks are almost completely protected from
creditors looking to recoup their money, they can still harass you for payment
and make life difficult.
Here
are some of the most common reasons elderly people give for avoiding bankruptcy
and why those reasons are invalid.
It’s embarrassing.
We’ve
all been taught to pay our debts and not shirk our obligations. However, in a predatory lending environment
like the one we’ve seen in this country over the past 10 years, it’s far too
easy for people to be taken advantage of by unscrupulous lenders who pile on so
much interest that it’s almost impossible to repay the debt. The embarrassment should be on their part—not
the victim of their predatory lending.
It costs too much money.
Actually,
many bankruptcy attorneys will take payments and in consideration of the amount
bankruptcy saves you through discharged debts, it costs less than doing nothing
at all.
It ruins your credit.
In
many cases, particularly Chapter 7 bankruptcy, filing for bankruptcy can
actually raise your credit score—particularly if you’ve been behind on payments
for a while, or are more than 90 days late on several accounts. If your credit score is indeed lowered, a few
months of paying your now-reduced and affordable payments on time will quickly
raise it.
It sets a bad example for the children.
Taking
responsibility and admitting that you are in over your head is the best example
you can set, and that’s what bankruptcy allows.
If you pass away with all that debt in your name, your estate will not
go to your children and family—it will go to creditors. With that in mind, which approach do you
think your family would most benefit from?
The answer, of course, is bankruptcy.