Rancho Cucamonga Bankruptcy & Retirement Lawyer
Seniors can quickly amass debt, even when they are living frugally. Thousands of Californians are suffering from medical debt, and many more use credit cards to help them pay for necessities. For many seniors, bankruptcy might be the fix they need to get out from under debt and breathe easier.
However, filing for bankruptcy when retired presents unique issues. When consumers are no longer working, they naturally are worried about what assets they might lose. And, a little known feature of bankruptcy is that you might jeopardize your home, retirement accounts, and other assets. Even if retirement is a few years away, you should proceed carefully. Get expert, timely legal advice about your options. Contact Wadhwani & Shanfeld today. Our Rancho Cucamonga bankruptcy & retirement lawyer will discuss whether bankruptcy is right for you and which option to choose.
Key Considerations with Bankruptcy & Retirement
Bankruptcy is a convenient way of stopping collection activity, like a foreclosure or debt lawsuit, while eliminating certain eligible debts. However, there is one key consideration when it comes to filing a Chapter 7 bankruptcy. This is the faster of the two main consumer bankruptcies, but you can lose non-exempt property.
That’s the trade-off. The trustee who takes over your bankruptcy will review all property you own, including investment and retirement accounts, along with real estate. California law allows people who file for bankruptcy to exempt certain assets. That means the trustee cannot take them.
The good news is that most retirement accounts are exempt, including a 401(k) or pension plan. Consequently, you won’t lose them if you choose to go the Chapter 7 route. Individual Retirement Accounts are not fully exempt, but over $1 million will be.
However, if you take withdrawals from a retirement account and deposit them in a bank account, you will likely lose it. Also, money you are saving up for retirement is also likely not exempt. You should discuss whatever accounts you have with an experienced lawyer.
Other concerns involve whether you can file a Chapter 13. This is a wage earner’s bankruptcy, so you need to show regular income. If you are thinking of retiring, this might not be the right option for you.
What About Social Security Benefits?
Many retirees rely on Social Security income in retirement. They have paid into the system for decades and can finally begin receiving monthly benefits at age 62. The good news is that federal law exempts Social Security income, which cannot be used to repay a creditor. That is comforting to our clients who receive these benefits.
Speak with a Qualified Bankruptcy Lawyer Today
Wadhwani & Shanfeld has helped many people of all ages deal with debt, including credit card and medical debt. If you are struggling with heavy debt loads, now is the time to call our firm to speak with an attorney about your options. We are prepared to help anyone, including senior citizens, identify the best debt solutions for their situation. A Rancho Cucamonga bankruptcy & retirement lawyer is available to take your call.
