Avoiding Bankruptcy in Retirement
Bankruptcy lawyers sometimes present bankruptcy as the only way out of a debt problem. In nearly every situation, it’s better to receive credit counseling before even considering damaging your credit score and endangering your lifestyle with bankruptcy.
According to an article by U.S. News & World Report, a growing number of senior citizens opt for bankruptcy in retirement. In fact, the number of people age 65 or older who filed for bankruptcy tripled between 1991 and 2007 or from about 2 percent up to 7 percent.
Of course, younger people also have challenges with credit card debt. By meeting with a trained credit counselor through Christian Credit Counselors, you can receive a free debt analysis. You will be under no obligation, but can learn about possible solutions. Before you decide, it’s important to know some of the negative outcomes associated with bankruptcy, especially in certain circumstances.
When you need a new job
It’s never a good idea to declare either Chapter 7 or Chapter 13 bankruptcy when you are about to go job hunting. Many employers run a credit check on their employees to see if they are financially responsible. If you plan to work in the banking industry, it’s especially important to have a good credit score.
When you face repossession
If you choose Chapter 7 bankruptcy, your are subject to liens against your home and other belongings, depending on where you live. A bankruptcy trustee will sell your non-exempt assets to pay off your debt. While laws protect money you have in personal IRA, 401(k) and other retirement accounts, any inherited retirement accounts are not protected in bankruptcy. If a lender wants to repossess a vehicle, it’s usually better to work out a way to budget for the payments instead of letting it go in a bankruptcy.
When you want to buy a home or rent
If you plan to move, you don’t want to have a bankruptcy on your records. Most property manager conduct a credit check. In many cases, a rental application will ask if you have declared bankruptcy. As for buying a home, bankruptcy usually prevents a prospective buyer from receiving a mortgage loan approval.
Fortunately, you can receive credit counseling instead of going through bankruptcy. Bankruptcy isn’t a cure-all as many debts can’t even be eliminated such as child support, student loans and money owed to the IRS. With credit counseling, you learn how to budget all your obligations. After receiving a budget and debt analysis, you can get started on a Debt Management Plan.
At Christian Credit Counselors, our team lowers your interest rates and consolidates you debt into one easy to manage payment.
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