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When Should Senior Citizens Consider Filing for Bankruptcy?Senior citizens who are in debt may look at bankruptcy differently than someone younger. Their incomes are often lower than when they were working, making it more difficult to pay their debts on their own. They may also have a lot to lose if a creditor obtains a judgment against them and they have accumulated valuable assets during their lives. Bankruptcy may not be right or necessary for every senior who is struggling with debt, but many seniors could benefit from the process. If you are a senior citizen, here are three situations in which you should strongly consider filing for bankruptcy:

  1. Your Medical Bills Are Piling Up: It is an unavoidable fact that your medical expenses will increase as you get older. You will have more visits to the doctor to monitor your health and are at greater risk of needing an expensive medical procedure or your monthly medications are incredibly expensive. A run of bad luck with your health can leave you with outrageous medical bills that your health insurance does not completely cover. By filing for bankruptcy, you can potentially discharge those bills in a matter of months or enter a manageable repayment plan.
  2. You Are Still Working: Some seniors continue to work beyond the age that they expected to retire, usually because they need the income. Others start a second career at a new job to keep themselves busy after retirement. If your creditors receive a judgment from a court, the creditors can obtain writs of attachment and begin seizing assets as one of their means of enforcement. They cannot take from your social security money or retirement benefits that you have not withdrawn, but they can take from the income you are earning at your job. Filing for bankruptcy will put an automatic stay on collection activities.
  3. You Have Valuable Assets You Need to Protect: Seniors often have a large amount of equity in their homes and vehicles. If you are at risk of defaulting on your home mortgage or vehicle loan, bankruptcy can protect your equity in those properties. Texas’s homestead exemption allows you to exempt your total equity in your home during bankruptcy. Texas’s motor vehicle exemption allows you to exempt one vehicle per licensed member of your household or a vehicle used to transport an unlicensed household member. The second part of the vehicle exemption is relevant for seniors who are no longer allowed to drive but still own a vehicle.

Contact a Frisco Bankruptcy Attorney

Filing for bankruptcy is an important decision that you should discuss with a professional. A Denton County bankruptcy lawyer at The Page Law Firm can advise you on whether bankruptcy would be useful in your situation. Schedule a free consultation by calling 214-618-2101.

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How Bankruptcy Can Cure You of Medical DebtMedical bills are one of the top sources of unpaid debts in the U.S. According to a recent academic study, two-thirds of the people who file for bankruptcy cite medical issues as one of the key factors that led to their decision. Expensive medical treatment can have a compound financial effect on patients:

  • Patients may lack adequate health insurance coverage or savings to pay for an unexpected health problem.
  • The patient may lose income if the injury causes a temporary or permanent disability that prevents them from returning to work.

If your healthcare debt becomes overwhelming, bankruptcy allows you to discharge your unpaid medical bills or repay them perhaps at a reduced cost.

When to Consider Bankruptcy

If you have good credit and little debt other than your medical bills, you should explore repayment alternatives before choosing bankruptcy. You may qualify for an assistance program that will reduce what you owe. However, some hospitals do not offer assistance programs, while others may have strict income limits to qualify. You also must consider your ability to repay other debts, such as credit cards and a home mortgage. Bankruptcy is a means of managing all of your creditors at once and can be an excellent strategy to help get you back on track

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HAVEN Act Protects Veteran’s Disability Benefits During BankruptcyMilitary veterans can be vulnerable to financial struggles after they return to civilian life. According to U.S. Census data:

  • Approximately 125,000 veterans filed for bankruptcy in 2017;
  • Veterans accounted for 14.7 percent of the people who filed for Chapter 7 bankruptcy; and
  • Veterans accounted for 15 percent of the people who filed for Chapter 13 bankruptcy.

Disabled veterans, in particular, may struggle to find and keep employment and often rely on their veteran’s disability benefits. A federal law enacted in August provides new protections from creditors for those disability benefits when a veteran files for bankruptcy. 

The HAVEN Act

The Honoring American Veterans in Extreme Need (HAVEN) Act was signed on Aug. 23, after the bill passed both chambers of Congress with bipartisan support. The act states that specified federal disability payments for veterans will be excluded when calculating a bankruptcy filer’s income. Qualified disability benefits include:

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How to Know When Bankruptcy Could Help with Your Student LoansMore than 44 million borrowers in the U.S. owe approximately $1.5 trillion in student loan debts, according to 2019 statistics from the Institute of College Access and Success. Recent college graduates make up many of those who are in debt. For instance, 2017 graduates owe an average of $28,650. Young professionals are particularly vulnerable to falling behind on student loan payments because they likely are not earning enough income to make payments and support themselves. At what point should you file for bankruptcy in response to your student loan debt? There are several situations in which bankruptcy may be one of your strongest options for solving your student debt crisis:

  1. You Have Defaulted on Your Loan: Your lender will consider you in default of your student loan if you have not made payments in 270 to 360 days. At that point the lender may file a lawsuit against you, seeking full recovery of what you owe. Your lender does have the ability to garnish your wages. Filing for bankruptcy will put an immediate stay on the lawsuit, as well as wage garnishment, and give you time to consider your options.
  2. You Are Running Out of Repayment Options: Lenders, particularly those with federal student loans, may offer repayment and forgiveness programs that will reduce what you owe or temporarily lower your payments. However, these programs may be insufficient if your loans are high or you lack the income to make even minimum payments. With these options exhausted, bankruptcy may be your only way to restructure your total debt obligations, which could give you the ability to get on track with student loan repayment.
  3. Your Student Loans Are Causing Financial Hardship: In order to discharge your student loan debt at the end of your bankruptcy, you will need to show that making payments will cause you undue hardship. Using the Brunner test, a court may consider you eligible for discharge if you could not maintain a minimal standard of living while making payments, are unlikely to improve your financial situation for the duration of the repayment period and have made good-faith efforts to keep up with payments.  However, this a very high burden to meet and is rarely met.
  4. You Have Other Debts: Your student loans might be just one source of debt, along with credit card debts and car loan payments. Even if you do not qualify to discharge your student loans, bankruptcy could allow you to discharge other debts and leave more money available for student loan payments.

Contact a Colin County Bankruptcy Lawyer

Approximately 2.9 million Texas residents owe $85.4 billion in student loan debt, which is the second-highest for any state in the U.S. Most of them will not default on their student loans, but it can be difficult to keep up with loan payments and the increasing cost of living. If you are falling behind on payments with no signs of relief, a Frisco, Texas, bankruptcy attorney may be able to help. Call 214-618-2101 to schedule a free consultation with The Page Law Firm, so you can determine whether bankruptcy is the right solution for you.

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How Bankruptcy Can Help When Facing a Credit Card LawsuitCredit card companies have the right to file a lawsuit against you if you have not paid the balance you owe. They will not immediately sue you after your first missed payment but may consider it if you have not paid in several months and are uncooperative. Texas has a four-year statute of limitations on collecting unpaid debts, and credit card companies may feel pressured to take legal action before the deadline passes. There are several ways to respond to a lawsuit and protect yourself, including filing for bankruptcy. 

How a Lawsuit Works

A credit card company files a lawsuit in hopes of getting a court judgment that forces you to pay what you owe. The process starts when you are served notice of the complaint against you and a summons for a court hearing on the lawsuit. You have to respond to the summons, and failing to respond could result in the court issuing a default judgment in favor of the credit card company. With a court judgment, the credit card company could use more forceful means of debt collection, such as bank levies and liens on your property and, if the judgment is from a state other than Texas, wage garnishment. 

Your Response

There are several ways that you can prevent a court judgment against you in a credit card lawsuit, including:

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National Association of Consumer Bancruptcy Attorneys State Bar of Texas
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