Michigan Bankruptcy and Senior Citizens

The economy, increased healthcare costs, and the threat of foreclosure cause seniors to consider Bankruptcy as part of their retirement plan.

Once you are retired and on a fixed income it may not make sense for you to take money from your retirement account to pay off large amounts of medical or credit card debt. That plan will spend down your nest egg and your withdrawal will be taxed as income.

For seniors with pressing medical bills and credit card debt, it may make more sense to file for Bankruptcy in Michigan. Bankruptcy has helped many people by giving them a fresh start to their new lives without the burden of overwhelming debt. Seniors may even be able to keep their homes.

Up to one million dollars in assets in IRAs and other qualified retirement accounts are exempt property. Exempt property is property that creditors are not entitled to take from you to satisfy a debt. Seniors can discharge their debts while keeping their retirement income for basic living expenses. This becomes increasingly important as the number of people who retire is increasing and there is serious concern that social security payments may be reduced.

Many Michigan seniors have rapidly increasing credit card debt. The reason for this is two fold: medical care expenses can now be used to pay medical expenses and the usury laws in most States have been rescinded. In other words the interest rates are very high. In the past a 25 per cent interest rate on a loan was criminal usury. Now credit card companies can charge rates even higher than 25 percent. These are almost impossible to pay off, especially on a retirement income.

Bankruptcy is available to seniors and can be a helpful tool for planning ahead for retirement or for improving the quality of life for those already in retirement. Contact our Ann Arbor / Ypsilanti Michigan Bankruptcy law firm for a free consultation.