Because they live on a fixed income, senior citizens are especially vulnerable to credit card debts, which can quickly spiral out of control. For many of these elderly borrowers, bankruptcy is a powerful tool, offering a way out of debt and providing invaluable peace of mind. Unfortunately, worried about the example they would be setting and the embarrassment of being unable to pay their debts, many seniors hesitate, despite the wide range of advantages of filing for bankruptcy protection.
1. The Automatic Stay
Every bankruptcy petition includes an automatic stay, which puts an immediate stop to harassing phone calls, threatening letters, and any other collection activity. If lenders have initiated any foreclosure proceedings or filed lawsuits against you, they will have to cease while the debts are discharged. For many seniors, the peace and quiet are well worth the expense and difficulty of filing for bankruptcy.
2. Credit Score Improvement
While filing for bankruptcy will have a dramatic impact on your credit score, in the long run, it is not as damaging as a history of late payments and delinquent accounts. Eliminating your unsecured debts will allow you to concentrate on your car loan, mortgage, and other secured accounts, which will eventually improve your score. The Federal Reserve Bank of New York determined that people who file for bankruptcy actually recover a better credit score than those who struggle with their debt. Read the article here.
3. Protecting Your Assets
While credit card companies cannot force you to sell your home to pay off debts, if you pass away with significant bills, your estate may have to liquidate your assets before your descendants can inherit anything. Filing for bankruptcy can protect your assets after you’re gone, making it one of the most effective estate planning vehicles available.
For over 35 years, Eugene S. Melchionne Attorney at Law has been helping senior citizens throughout Waterbury, CT, get their lives back on track with a variety of bankruptcy and debt relief options. Learn more about bankruptcy on his website now, follow him on Twitter for additional advice, or call (203) 757-3437 to begin reclaiming your life from debt.