Seniors: Speak With a Bankruptcy Attorney Before Giving Up!

Senior citizens often need a bankruptcy attorney in order to protect their freedom and independence.  It is common for seniors to run into financial difficulty.  Careful planning is often not enough to prevent financial troubles because life has a way of throwing curve balls.  For example, monthly retirement payments may be lower than expected, stocks that you received dividends from may no longer be paying out, and medical bills may have caught you by surprise.  These are only a few examples of the many unknowns that when they happen, can leave seniors in a financial jam. If this sounds like you – you’re not alone. 

We work with a lot of seniors that are worried that they will have to give up their home in order to take care of debts and stop the collector calls.  After living in your home for decades and working hard to pay down the mortgage, you shouldn’t have to walk away while in your retirement years.  Don’t give up hope because we can help.

In a Chapter 13 bankruptcy, you can have a payment plan that will prevent your creditors from pursuing further collection, and you can stay in your family home.  In this scenario, we can help you to create a plan after reviewing how much money you have come in every month and what your true expenses are.  This is different than when you file for a loan.  Instead of only looking at your debt payments, we want to know what you spend on groceries, gas, medication, doctors, etc.  In order to capture a true picture of your financial situation, we need to know every detail. As a bankruptcy attorney, we will then work to create a plan for settlement and repayment.

When you file a Chapter 13, you are proposing to repay some of your debts but not all of your debt.  Once we determine how much money you have to apply towards debt payments every month (after living expenses and bills) we will propose to make a set payment amount on a monthly basis.  It will be disbursed amongst your various creditors for a period of a few years.  Any debt that remains will be discharged or eliminated.  For example, if right now you should make $950 in monthly debt payments and owe a total of $45,000, we could propose that you only pay $300 a month for three years which equals $10,800.  

The court will decide whether or not the plan for repayment is acceptable. Your creditors will also have the opportunity to protest, but most of the time they are happy to get something instead of not getting paid at all.  As a bankruptcy lawyer, it is our job to demonstrate why you should be able to file for a Chapter 13 and why the repayment plan is the best you can do.  Once it goes through, your creditors cannot come after you for any more money and you will be able to live comfortably in your home.   

If You Have a Good Salary You Can Still Get Help From a Bankruptcy Lawyer

Many of our clients ask if they can work with a bankruptcy lawyer if they earn a lot of money.  The answer is yes.  We have helped many high-income earning clients to file for bankruptcy in order to resolve their debt situation. The type of bankruptcy that you can file is dependent upon several factors including how much money you make.  If you think that you earn too much, it is that much more important to work with an attorney.

While you may earn a good living, you may not be considered a “high-income debtor” in the eyes of the court.  Whether or not you are is dependent on several factors.  The court will first look at where you live.  This is important so that families living in D.C. are not compared with those living in Ohio, as the cost of living and how much people make are different throughout the country.  Next, they will consider your family size.  As your family grows it becomes more expensive to feed, clothe and care for them.  This is understood within the bankruptcy court and it helps a lot of people to qualify for a Chapter 7 that otherwise wouldn’t.

In order to be a “high-income debtor” you must earn above the median income for your family size in your state.  In California, if you make $77,896 and have a family of four you are at the median income level.  For every member of your family, the amount that you can earn is increased.  This changes every year so speak with a bankruptcy lawyer to get the updated figures.  As long as you are at the median income level or below it, you can qualify for a Chapter 7 where all or most of your debts are eliminated.  If you are above it, the next step is to take a means test. 

A means test gives you the opportunity to provide more information about your income and your debts in an attempt to show why you should be allowed to file a Chapter 7.  As a bankruptcy lawyer, we can also make the case for why you should be allowed to do so.  If you are active duty military or National Guard, you are generally exempt from taking the test so let us know during your consultation if you are a service member.  It may help you to file a Chapter 7.

If you do make too much money, you can still file bankruptcy but you have to file a Chapter 13 instead.  A Chapter 13 can still eliminate some of your debts, but it does so by creating a settlement and payment plan.  This way your creditors still get some money back, but the amount is reduced enough to be affordable.  In this situation we can help you to create a proposed repayment plan that demonstrates what your true disposable income is after all of your expenses (including groceries and gas) in order to determine what you can apply monthly towards debts.  

As a bankruptcy lawyer, we can help you to navigate through the process so call today for your consultation.