The percentage of seniors filing for bankruptcy is still much lower than for younger people, but about 18% of the people filing for bankruptcy protection are over 65. This is a significant increase. Fifteen years ago, only about 2% of seniors filed for bankruptcy. The reason seniors choose bankruptcy tends to be because of medical bills and credit card debt, and older people tend to wait as long as possible before filing for bankruptcy.
Most older people don’t have the ability to increase their income when faced with increasing debt. Instead, they may use credit cards to try to catch up, but that never works.
Protect Social Security Funds
There is one precaution that seniors who are in financial difficulty should take. If a creditor gets a court judgment, they could try to garnish the bank account. It’s not as easy to do this as it once was, but seniors can protect Social Security deposits by keeping that money in a separate account. Notifying creditors of this in writing will protect those funds.
Retirement Accounts and Homestead Exemptions
1. Most retirement accounts, such as pensions and 401(k)s, are exempt and can’t be touched by creditors.
2. IRAs are exempt up to $1,171,150 in Kansas.
3. Equity in a home is totally protected in Kansas, provided that the home is occupied or that the senior intends to occupy the home when the bankruptcy is filed. There is also a limit on the acreage, which can be no more than one acre for homes located in a town or city or 160 acres for a farm.
Can a Nursing Home Refuse a Senior Who Declared Bankruptcy?
This is one of the issues that worries an older person. Legally, a nursing home that accepts Medicaid can’t reject someone because of a prior bankruptcy. However, a private facility could refuse someone based on either a large amount of debt or a bankruptcy. If a senior is refused, a family member could agree to guarantee payments.
If a senior has no assets at risk, there may be no point in filing for bankruptcy protection. Bankruptcy attorneys in Wichita would be able to explain the available options based upon the client’s unique situation. The Law Offices of Todd Allison and Sarah Newell have been representing people of all ages through the bankruptcy process for over 16 years. Contact these Bankruptcy attorneys in Wichita to learn how they can help you. You can also visit them on Google+ for more information.