Are you retired or considering retiring soon? If debt is a major issue that is keeping you from enjoying retirement or preventing you from retiring, consider a bankruptcy to help relieve you of your debt to help you achieve your retirement goals. A bankruptcy can eliminate several types of consumer debts including credit card debt, pay day loans, personal loans, bank loans. Most unsecured debts can be discharged in a bankruptcy with few exceptions. Here are a few facts that can help you if you are considering filing a bankruptcy.
1. You can have retirement income and still file a bankruptcy
A common misconception is that you can’t file a bankruptcy if you have income from fixed income sources or pension. Actually, you can still file a bankruptcy even if you have income. There is a specific income threshold where you can still qualify for a bankruptcy depending on the number of people in your household. But a good attorney will also tell you that your income isn’t the only factor. In some cases, even if your income is over the allowable threshold designated for your household size, you may still qualify for a bankruptcy via a “means test”. This test is simply a description of your financial situation that can illustrate to the bankruptcy trustee that your expenses are above your income while still within reasonable living expenses (meaning you can’t have a $2000 per month Ferrari payment and consider that a reasonable living expense).
2. A bankruptcy will not take away your home, cash, assets, or belongings
A bankruptcy is not designed to take away your cash or assets. You will not lose your car or your furniture. You’ve worked hard to have the assets you already own and they may not always be taken away from you. Many people are under the impression that you will lose everything in a bankruptcy. As we have stated many times over on this site, a bankruptcy is a right that is given to you by the government to allow you to discharge your debts, but also allow you to keep what you need to live like your home equity, a car, your cash, your clothes, your furniture. All assets that you keep do have a reasonable limit. Your attorney will be able to tell you what these specific limits are. For one example, if you own a home, you can exempt $100,000 of home equity if you are single, $100,000 equity for married couples, and $175,000 equity if you are age 65 and older. There is a long list of exemptions in the bankruptcy code to allow you to keep assets.
Check your options in a Chapter 7 or Chapter 13 bankruptcy to see if a bankruptcy might help you plan your retirement years better.