Indiana Bankruptcy for the Elderly?

            None of us picture financial worry in our golden years.  If you are anything like me you picture yourself sitting in a beach chair sipping a fruity drink without a care in the world.  Unfortunately, this is just not reality for some senior citizens.  I have met with plenty of seniors at Halcomb Singler who are struggling with a fixed income and mounting debts.  I have also gotten calls from adult children concerned with the financial situation of their parents wondering if it would make sense to file a Chapter 7 Bankruptcy, but I need to meet with the person who is actually considering filing bankruptcy.

            Ultimately, it is a reality that some seniors need to file bankruptcy.  However, whether bankruptcy is the correct path depends on the senior.  One of the most common scenarios I come across is where a senior has no income outside of social security and a small pension.  Typically the senior does not own his or her home and does not have any other significant assets.  At the same time that senior has gotten into trouble with credit and has received several lawsuits.  In Indiana there is not much a credit card company can do to collect from that senior.  A credit card company cannot garnish a pension or social security.  However, the senior can be made to appear in court from time to time to answer questions regarding his or her income/assets.  In this situation it is common for me to tell the senior that there is really no need to file bankruptcy because the senior has little if nothing that the creditor can take. It seems pointless to pay a bankruptcy attorney to file a bankruptcy to protect the senior when the senior is already judgment proof.  The caveat I typically give is that a bankruptcy may be an option if the senior is very afraid of having to appear in court.  Although these proceedings, in my opinion, are very straightforward and simple, not every senior agrees with me.  For some seniors the idea of going to court and having to answer questions about income and assets coming from a stranger (the attorney for the credit card company) is just about the worst thing they can imagine.  For those seniors the finality of filing bankruptcy is sometimes a better option than appearing at court proceedings.  While for others that have a thicker skin they would prefer not to file bankruptcy and realize that since they do not have any garnishable income or attachable assets that there is nothing to fear.

            On the other hand, some seniors are now finding themselves in a position where they need to continue working in order to make ends meet much longer than they had hoped.  For those seniors who are still working bankruptcy may be an option as it can prevent them from having their wages garnished in the event of a lawsuit.  In Indiana a judgment creditor can garnish up to 25% of your take home pay so long as you make a minimum amount (I believe it's about $300.00 per week).  If the 25% is a big enough chunk of money out of the senior's pay check that without it he or she will not be able to meet minimum living expenses it may make sense to file bankruptcy.

           A final fact scenario I see commonly is the senior that owns his or her home outright, but has accumulated significant debt over the years.  Unless the home is worth very, very little, a Chapter 7 bankruptcy is not going to be the answer.  The reason for this is that the senior would likely have to surrender the home to the bankruptcy trustee for it to be sold and the non-exempt portion to be distributed to creditors.  Depending on the value of the home and whether the senior has any disposable income at the end of each month, a Chapter 13 bankruptcy may be appropriate.  However, it is often the case that bankruptcy is not a viable option when a senior owns his or her house outright.  Sometimes there is simply too much equity in the house to protect.  In these situations payment plans with the creditors or potentially taking out a mortgage on the home to pay off debt can be viable options.

            As you can see, no one situation involving debt and people is the same.  But since the elderly tend to have less income from work and more from social security and other protected sources it typically makes less sense for them to file bankruptcy.  However, this is an overgeneralization and any person concerned about debt and considering bankruptcy should meet with a bankruptcy attorney practicing in their area.  If you live in the Indianapolis, Carmel, Tipton, Zionsville, Kokomo, Noblesville, or Fishers area and want to speak with a bankruptcy attorney call our office at 317-575-8222 or click here.  There is no fee for the consultation and I am happy to answer your questions and discuss whether or not bankruptcy makes sense for you.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.