More and more retirees find themselves facing more debt than they can afford, and face a decision: Has bankruptcy solved their financial problems?
Many people find that they have reduced their income after retirement and they find themselves using credit cards and bank loans to pay for monthly expenses. For a fixed income, it is difficult to make repayments on their debts, and then they find that they are collecting calls from agents and cashiers. This is very stressful. They do not know what to do.
When retirement or seniors face debt problems, they have many choices.
First, they can repay their debts. It is possible to cut spending to free cash to pay down debt. It is possible to sell assets that they no longer need, such as cars they no longer need, or larger houses than they need.
Second, they can ask the family for help. This is a good choice, but it is embarrassing for your children to ask them for help.
Third, they can try to obtain a debt consolidation loan and consolidate their debt into monthly payments. This is usually difficult because fixed income is difficult to pay.
Fourth, they can try a debt management plan through a non-profit credit counselor. He will negotiate the repayment plan. Again, fixed income is hard to pay in large amounts every month.
The next choice for Canadian residents is to try consumer proposals, or Americans can try Chapter 13 wage income plans. This can provide protection for your creditors, but it can also lead to potential monthly payments.
The next choice is personal bankruptcy. Bankruptcy cleared the debt and provided protection for creditors, but also assumed various obligations, including payment as part of the bankruptcy process.
The last choice is nothing. One of the main reasons for applying for bankruptcy is to prevent creditors from providing wages or seizing assets. If you retire and receive pension income, you have no salaries you can specify. If you don't own a fancy house or car, you may not have any asset that can be specified. In other words, you may not need bankruptcy protection if you have nothing to protect.
You can open a new bank account at the new bank (to prevent your bank from helping you make unauthorized payments), and you can get a new, unlisted phone number (to prevent collection agencies Annoying call).
Doing nothing is a stressful option, but for many people it is the right choice and the lowest cost.
Before deciding on any of these options, you should consult a bankruptcy trustee, bankruptcy lawyer or other trusted financial advisor to review your choice and determine which option is right for you.
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Orignal From: If you retire, why personal bankruptcy may be the wrong choice
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