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A recent study revealed that an increasing number of seniors are filing for bankruptcy. Taking their assets and subtracting debts, these seniors have an average wealth of negative $17,390. If that wasn’t shocking enough, saddest of all is that, per the study, seniors who filed for bankruptcy had struggled for five years to avoid it.
None planned to get to that point. It wasn’t that long ago, per the study, that full retirement was age 65, and Medicare covered the majority of health care with only 12 percent of income going to out-of-pocket costs. Now full retirement age is creeping up, and out-of-pocket medical care is about 20 percent of income.
What also has climbed in recent years is the amount of debt we take with us into retirement. As you approach retirement, rule No. 1 would be to take care of your credit. Say no, starting now, to making loans, giving cash gifts and co-signing for others.
If you want to be frightened away from the idea of bailing out via bankruptcy should things go wrong, go online and read about it. Learn about your state laws. Some debts are just not dischargeable. Some types of bankruptcy are nothing more than an extended repayment plan. You could lose your home to pay off creditors, even if the home is paid for. Depending on the laws in your area, there might be a cap on how much of your home equity they can take, but it might be all of it.
Some or all of your retirement accounts or Social Security might be protected in bankruptcy, depending on what bankruptcy method you use. If you’re considering bankruptcy because you don’t see another way out, get advice. There might be another way to handle your debts.
(c) 2018 King Features Synd. Inc.
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