Top Reasons Why the Elderly Don’t Want to File Bankruptcy (But Should)

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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.