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Articles: Bankruptcy Articles and Essays

Bankruptcy hits seniors the hardest

With a dwindling economy comes financial hardship. People from all walks of life are forced to deal with climbing debts and bills coupled with job loss. For many of these people the best option to resuscitate their finances is by filing bankruptcy.

This plague of too many bills and not enough income seems to have hit the senior community the hardest. Often swamped with overwhelming medical bills, seniors are filing for bankruptcy at a much faster rate than adults.

From 1991 to 2001 the rate of personal bankruptcy filings of those 65 years or older jumped by 150% according to research by the Consumer Bankruptcy Project. Experts believe the reason is in fact medical bills that many seniors are unable to pay with their limited retiree incomes.

When strict new laws were passed in 2005, bankruptcy filings were initially down, but have since risen again in response to economic struggle. The senior age group is still seeing the highest number of filings.

Bankruptcy is an important option for seniors as many lack jobs that can help them climb out from their piling debts.

Top five mistakes debtors make pre-bankruptcy

5. Pretending nothing is wrong. Once debts reach a point where your monthly income will not allow you to climb out from under your bills, there is a problem. Acting and hoping that one day you will figure out the best course of action, is in fact the worst course of action. Don’t discount bankruptcy as an option.

4. Deceiving creditors. Being honest with your creditors is the best policy. Often they will be able to help you by upping credit limits or lowering interest rates. By simply dodging creditors and lying, you may burn that business bridge.

3. Letting reserves deplete to nothing. Never use every penny to pay off bills. Always keep cash on hand. You stand a better chance of reorganizing and sustaining post-bankruptcy if have available reserves.

2. Being ashamed of bankruptcy. Bankruptcy does not hold the reputation it did decades ago. Not only is bankruptcy more common today, it serves as the only option for many people. 

1. Going at it alone. Bankruptcy is a complicated legal proceeding that should always be handled by a qualified attorney. Don’t get lost in the legal jargon and fail to fix your finances. By allowing an expert attorney to file on your behalf you stand a much better chance of being free from debt.


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