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6151 Lakeside Dr.,  Suite 2100
Reno, NV  89511

Reno Bankruptcy Attorney

Stephen R. Harris, Esq.

“Providing Financial Protection for 46 Years”

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Senior-citizen bankruptcies are on the rise, driven by socioeconomic factors such as insufficient Social Security payments, higher health-care costs, and increased individual responsibility for retirement savings.

Between 2013 and 2016, 1 in 8 filers in the U.S. was age 65 or older; during the same time period, 21% were age 55 to 64, according to Robert Lawless, law professor at the University of Illinois’ College of Law who has co-authored research on the subject. There’s been an overall trend toward older filers since the study was first conducted in 1991, he says.

While some of the stigma of declaring bankruptcy has dissipated, there can still be negative consequences such as losing property and long-lasting effects on credit. Before filing, make sure you weigh your options and avoid these potentially costly mistakes:

  • Not sufficiently exploring self-help options
  • Haphazardly liquidating assets
  • Taking on additional financial obligations to pay the bills
  • Not seeking legal help

If you’re feeling in over your head, it’s advisable to consult an attorney. The Eldercare Locator connects older Americans and their caregivers with trustworthy local support resources, including legal help, based on their location. Seniors can also use the Legal Services Corp. website to locate nonprofit legal aid organizations in their state that may be able to help them navigate debt and bankruptcy-related issues.

The website of the National Association of Consumer Bankruptcy Attorneys is another resource seniors can use to locate an attorney in their area. For seniors who don’t qualify for legal aid, but are concerned about fees, there are a number of firms that will do pro-bono work and sometimes firms will offer reasonable and discounted payment plans.

Why Many Older Americans Are Going Into Debt?

Experts have observed a rapid surge of retirees getting into insurmountable debt. The skyrocketing figures are due to the following reasons:

  • Credit card debt
  • Medical expenses
  • Job loss
  • Reduced income
  • Expensive insurance co-pays

Many seniors also experience a lack of support, lack of access to necessities, and isolation. Filing in Nevada for bankruptcy offers a way to ease the burden of debt and get peace of mind in their golden years.

What Kind of Bankruptcy Can Seniors Qualify For?

Most older adults filing for bankruptcy will qualify for either Chapter 7 or Chapter 13 bankruptcy:

Chapter 7 Bankruptcy

This type of filing will allow seniors to discharge most or all their debts. Chapter 7 is usually granted to filers who make less than their state’s median income.

The court may also order a means test to determine if an elderly filer can pay a Chapter 13 plan. Under Chapter 7, the court trustee may ask the debtor to turn over any non-exempt assets. These assets will be sold to help pay the petitioner’s creditors.

Chapter 13 Bankruptcy

This type of filing involves a three-to-five-year repayment plan. Successful filers generally get to keep their property and assets.

Older adults who still have steady income may prefer this repayment plan, especially for those who do not pass the means test or make more than the state’s median income. The success of filing may depend on selecting the right type of bankruptcy to file for. Therefore, it is best for petitioners to seek the help of a bankruptcy lawyer in Raleigh for expert assistance on the next steps.

Seniors May Be Able to Keep Their Homes After Filing for Bankruptcy.

There is something called a homestead exemption when it comes to bankruptcy laws. It is a certain amount of home equity that’s protected under bankruptcy. However, some seniors may risk losing their homes, especially if they have large amounts of equity or unpaid mortgage.

It is critical to learn how much equity the debtor’s state protects under bankruptcy. Some cover the full value of the petitioner’s home under Chapter 7 in Nevada. On the other hand, older adults may keep their home under Chapter 13, provided they are able to continue paying the mortgage. The repayment plan can also help debtors pay mortgage arrears.

Learn More About Bankruptcy for the Elderly in Reno.

Bankruptcy can pave the way for a more secure retirement for debt-ridden older adults. It is natural to have many questions about the decision to file, especially when it involves factors like your social security income and retirement accounts. Call the Harris Law office today at 775-786-7600 for a free consultation, also visit our new Facebook Page for more information.