Bankruptcy has helped a lot of people get a fresh start financially. For many of those who are struggling financially, bankruptcy offers a hope for renewal, and a chance for a brand new start that can help them reorganize their lives. One can see the benefits that one can get from wiping out an enormous debt and other obligations of a financial nature. This does not mean that bankruptcy is a positive thing. It is still something that should be avoided by all means necessary, but for those left without any other choices, bankruptcy offers an alternative way out of the difficult situation that they are in.
One interesting point these days is the growing number of people who are turning to bankruptcy in retirement as a means of ensuring that there will be enough money set aside for them when their retirement comes, or ensuring enough money remains during retirement.
With the number of people who are reaching retirement age increasing, the amount that one can get from social security benefits is being reduced. That means those who are approaching retirement age should start looking for ways by which they can continue to get some sort of income when they retire. Most retirees will not be able to rely on the amount that can be provided to them by social security anymore.
One way to increase the income that you see in retirement might include clearing any debt or obligation that is proving to be a hindrance for saving. With the economy being in the difficult situation that it is in right now, even those who were able to set aside a substantial amount in the past are finding out that it is not enough due to the overall under performance of the markets and the potential returns many folks were hoping to see. They are discovering the fact that they need to take some drastic measures in order to safeguard their retirement. Filing for bankruptcy before retirement or during retirement is one of those measures. It can be a means of strategic financial planning and a last ditch effort for safeguarding one’s retirement.
There has been an increase in the number of people who are using bankruptcy in retirement as a means of saving themselves financially. In fact the number of people over 65 years of age who have filed for bankruptcy has increased by three fold. By now you likely understand why retirement bankruptcies are increasing as well as the factors relating to such increases. However, you probably want to know if bankruptcy in retirement will affect your hard earned savings. Well there is some good news, a retirement account in almost all cases will not be affected when you file for bankruptcy. With Chapter 13 assets are not affected at all, and your retirement account is considered to be an asset. Payment plans are made from any earnings that you do have or are likely to receive. For Chapter 7 it is usually the same thing.
This does not mean that you should file for bankruptcy right away. If you are retired or nearing retirement age and you are encountering some difficulties with paying off your debts, you should consult a personal financial adviser, or a credit counselor. They can tell you if you have reached the point where you need to file for bankruptcy. In many cases bankruptcy is filed in order to get protection from creditors from garnishing one’s wages. In the case of those who are retired and who are no longer working, there are no wages to be garnished, so filing for bankruptcy should really be considered carefully under the advise of retirement bankruptcy attorney or other financial adviser.
A short article like this one, can not give you all of the subtle nuances related to the different potential outcomes of bankruptcy in retirement as well as the aspects particular to your case. So even though you can most likely rest assured that your retirement account is safe from creditors, you should consider whether bankruptcy during your retirement or leading up to your retirement is the best approach for you. Perhaps there are better way to pay off your debt that won’t harm your credit rating and could be considered a win win for both you and your creditors. Remember, there might be a need during retirement when you need access to quick credit. Having gone bankrupt during your retirement can curtail your ability to access credit when the need arises. All of these issues require careful consideration and should be discussed with your chosen retirement bankruptcy adviser or professional.