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Chapter 7 bankruptcy can ease the financial woes of seniors

Consumer bankruptcy filings in Connecticut continue to be vigorous despite the relative recovery in the economy. For example, personal Chapter 7 bankruptcy filings have grown among senior citizens who are 65 and older.  The main reason for that increase is the high cost of medical debt, which has hit the older population particularly hard due to the prevalence of fixed or static incomes among them. 

Seniors are also hard hit because they are more prone to encounter a serious medical condition requiring extensive hospital visits or complex surgical procedures and treatment. Perhaps surprisingly, some seniors report that it was the best decision that they could have made under the circumstances. According to consumer bankruptcy attorneys, the most striking aspect of seniors trying to deal with overwhelming medical debt and/or credit card debt is the obvious intensity of the stress and anxiety they suffer by trying to keep up with creditors' and collectors' demands.

The value of a Chapter 7 bankruptcy to seniors often lies primarily in the great relief of mind that they receive after the debt is totally and permanently erased by the proceeding, according to consumer bankruptcy attorneys. Medical debt is the leading cause of all bankruptcy filings nationwide. The situation may become exacerbated when seniors try to use credit cards to pay off the medical bills.

This simply starts a cycle of impossibly expensive debt loads that build up to a point of no return. Paying off the debt in installments would outlast the general life expectancy of the debtor, thus creating a pressured existence for their remaining years. It is true that the 2005 Bankruptcy Reform Act made it more difficult for some consumers to qualify to file a personal bankruptcy.

However, most seniors making generally a middle-class income are likely to be qualified to file a Chapter 7 bankruptcy under the required "means" test. The best way to become quickly informed of one's rights, options and qualifications for this extraordinary relief provided by federal law is to consult with an experienced consumer bankruptcy attorney. In Connecticut, such an initial  consultation will often be offered free of charge.

Source: forbes.com, "The Reasons More Older Americans Are Filing For Bankruptcy", Tami Kamin Meyer, Nov. 16, 2017

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