Bankruptcy And End Of Life Planning

Elderly Americans have been hit hard by the recession. Falling home values, depreciating retirement accounts and shrinking pensions have conspired to place many senior citizens in financial troubles which are often only relieved by bankruptcy. Many senior citizens hit by the contraction of the economy are finding it difficult, if not impossible to pay credit card debts , mortgage debt and provide for their basic everyday needs such as food and medical care.  Creditors looking for payments don’t care that a debtor is older, or poorer or ill, more lawsuits are filed against senior citizens than ever before leaving many fighting judgments and bank levies.  Adult children caring for elder debtors mistakenly believe that there is no reason for their parents to file bankruptcy because they are considered “judgment proof” due to their lack of non-exempt income and assets.  But the issues surrounding elder indebtedness often doesn’t rear its ugly head until after the death of the debtor.

Probate courts define an inheritance as the assets remaining after all the deceased debtor’s debts have been settled. This means that an indebted debtor’s assets can be completely liquidated by creditors in probate court before their children and grandchildren ever see a dime.  Some elderly debtors file bankruptcy to discharge many of those debts, leaving more assets to their surviving family after their death. Because bankruptcy can discharge unsecured debt such as credit cards and even wipe out judgments and discharge unsecured junior mortgages, elderly debtors and their loved ones benefit from the bankruptcy discharge.