Bank finance articles and tips

Many baby boomers facing retirement are also facing economic challenges unknown to previous generations of elderly Americans. So what can bankruptcy debtors do when trying to get a fresh start through bankruptcy while entering retirement? Below are a few tips:

Consider Income

If you're heading into retirement and bankruptcy, you will want to consider all sources of income. If you're eligible to receive social security income, creditors cannot seize the money even if you're in a Chapter 13 bankruptcy. If you have a 401(k) or pension, think about how much income it will provide. Can you cover the basics such as housing and food with your retirement payouts or will you need to reduce your lifestyle considerably after filing bankruptcy? If you find that your retirement income is insufficient to provide for the essentials after bankruptcy, you may want to consider part-time work that can supplement that income.

Medical Expenses

As we age, health complications become more of an issue. Retiring debtors filing bankruptcy should take into consideration their ongoing medical expenses. Do you have a chronic condition that requires medication? If so, how much of your income will you need to devote to paying for medications and other healthcare costs after bankruptcy? Do you qualify for Medicare, or other subsidized healthcare? When planning your life after bankruptcy make sure you take all of your medical expenses into consideration. A matter of fact, you may want to do a health checkup before exiting bankruptcy so that you have a clear picture of what's ahead.

Surviving Debts

While bankruptcy can discharge most debts, there may be some debts which survive the bankruptcy process. If you're heading into retirement after your bankruptcy, think about the cost of surviving debts and how you will handle paying them. If you have a mortgage, think about options for paying off the mortgage, selling or surrendering the property. If you find that you are unable to continue mortgage payments after bankruptcy, you may want to seriously consider surrendering the property during your bankruptcy. The same principal applies to other property such as a car or vacation real estate. Use your bankruptcy to reduce expenses as much as possible before retiring.

Family Responsibilities

If you have adult children or a spouse who depends on you financially, you need to consider this in your bankruptcy planning. While the bankruptcy court is understanding of your financial responsibility to a spouse, they may not show much understanding when you financially support adult children who are not disabled. In other words, the bankruptcy court will not allow a debtor to forgo paying debts so they can support an adult child who is not suffering from some physical or mental disability. In preparing for your retirement and bankruptcy, you should begin to immediately wean adult children off of your financial support.

Reed Allmand, sponsoring attorney for Bankruptcy.net, is constantly looking for ways to provide the best financial information for his clients. Whether you are considering filing for bankruptcy, or are currently going through a Chapter 7 or Chapter 13, visit http://www.bankruptcy.net for up to date news and information you need to know.

By Reed Allmand
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