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The number of seniors who petition for bankruptcy protection from their creditors has increased steadily in recent years. A combination of mounting debt and dwindling resources has forced many seniors to use loans and credit cards to pay for prescriptions, medical co-pays, and basic necessities. The financial stress they are under can become overwhelming. While a young person has the opportunity to rebuild themselves financially, many seniors do not. For them, the relief provided by the bankruptcy law can be dramatic.

The financial decline of seniors often goes unnoticed, even by their loved ones. In an effort to satisfy creditors, many will forego medication, cancel insurance policies and invade retirement accounts. Unfortunately, embarrassment leads many to postpone filing bankruptcy because they think that everyone will find out. Although bankruptcy is a matter of public record and is reflected on the credit report, chances are the only people who will know about the bankruptcy are the creditors and others with whom you have shared information.

The two types of bankruptcy available for most individuals are Chapter 7 and Chapter 13...



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    Under both chapters 7 and 13, the judge immediately issues a restraining order that halts all collection activities, including lawsuits, phone calls, collection letters, wage garnishments, repossessions and foreclosures. Most people who file under Chapter 7 are able to keep their cars and keep their homes so long as they can continue to make the payments. In the typical case, the judge signs an order that wipes-out credit card debts, medical debts, personal loans, payday loans and debts to finance companies. In many cases, old tax debts are also discharged under chapter 7. Debts not discharged through Chapter 7 include child support, alimony, student loans and recent tax debts.

    Chapter 13 is a repayment plan in which the person filing makes a monthly payment to a bankruptcy trustee who distributes the money back to the creditors. It is available to someone who earns too much money Chapter 7 and also for homeowners who want to keep their home but are facing foreclosure.

    Filing bankruptcy, however, is not for everyone. Just because someone is in financial distress and unable to pay their bills does not necessarily mean they should file for bankruptcy. A creditor has little leverage over a person who has little income and owns no real estate. Creditors cannot have you arrested and taken to jail for not paying a debt, nor can creditors garnish social security checks. Most seniors living in assisted-living communities would fall under this category and the financial benefit of bankruptcy may be marginal for such individuals.

    In sum, while fixed incomes that fail to keep pace with inflation have been driving up the number of seniors who file bankruptcy, it is not for everyone. Those with few assets that can stomach the phone calls and collection efforts may see little benefit in filing. On the other hand, the bankruptcy can still be a worthwhile experience if it brings peace of mind and restores a feeling of control over one’s life. Contact us today to get started down the road to peace of mind and a fresh start!



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At its core, bankruptcy is designed to give the debtor peace of mind by immediately stopping all collection efforts, including harassing phone calls, lawsuits and threatening collection letters.

In addition to peace of mind, bankruptcy is designed to provide a fresh start by eliminating credit card debt, medical debts and in many cases, tax debts and judgments; liens that creditors often place on your property.

Most people considering bankruptcy have two options: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy typically discharges the unsecured debts and certain secured debts as well. The person filing offers to turn over to the trustee any nonexempt assets, which the trustee can sell to repay creditors. Fortunately, most people who file bankruptcy in South Carolina are able to keep their homes, keep their cars, and keep all their property.

Chapter 13 Bankruptcy

In Chapter 13 bankruptcy, debtors make monthly payments to a Chapter 13 trustee who distributes the money to creditors. Car loans, tax debts, credit card debt, medical debts – even mortgage arrearages – all go into the Chapter 13 Plan. In South Carolina, the interest rate on unsecured debt goes to zero, and the interest rate on car loans drops to 5.25%.



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    Bankruptcy is not for everybody

    Although the great majority of people filing bankruptcy are able to keep their assets and emerge from bankruptcy unburdened by debt, bankruptcy can be a serious mistake if the person filing bankruptcy owns exotic cars, takes extravagant vacations or has fraudulently transferred assets to family members. Those who are unwilling to truthfully disclose their financial affairs or want to hide income or assets from the trustee should never file bankruptcy.

    Exemptions

    Exemptions are laws that protect your assets from being taken by the Ch. 7 trustee. Subject to several important exceptions and conditions, the South Carolina exemptions are as follows:

    Primary Residence $59,125 of equity is protected. $118,250 if residence is co-owned.
    Car $5,900 of equity is protected. $11,800 if car is co-owned.
    Household Items $4,725 of equity is protected. $9,450 if items are co-owned.
    Cash / Money in Bank $5,900 per person is protected, so long as not exempting your house. $11,800 if the money is co-owned.
    401(k) and IRA and other
    qualified retirement accounts
    100% protected.
    Pride and embarrassment cause many people to wait too long before taking action. All options - including non-bankruptcy options - should be explored with an experienced bankruptcy attorney before any missteps are taken. That’s precisely the approach we take at the Law Office of Sidney Wike. We will explain your rights, outline your options, and work closely with you throughout the bankruptcy process.

    Contact us today to get started down the road to peace of mind and a fresh start!



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