Young adults and senior citizens alike are legally able to file for bankruptcy. Of course, just because something is permissible does not always mean it is a good idea.
So, if you fall in one of the age extremes, you may be wondering, “Are you ever too young or too old to file for bankruptcy?” The answer is generally that no matter your age, it is the specifics of your situation that determine whether bankruptcy is the best option.
Why young people might file
Many young people, say those in their 20s and early 30s, file for bankruptcy because of credit card debt, student loan debt and even medical debt. In some cases, their parents may have stepped in to help them financially to an extent but are finished with the assistance. The good news is that young people have the rest of their lives to practice wise financial management after the fresh start that bankruptcy may provide. That said, many types of student loan debt do not get discharged, and medical bills can continue to be really expensive.
Why senior citizens might file
Medical expenses could be a big reason why many senior citizens consider filing for bankruptcy. Senior citizens might also be in dire financial straits after being lured into a scam. They may also have been struggling with staying financially afloat after a divorce or after entering retirement and not having a job. The good news is that, for the most part, retirement accounts and pension plans are exempt from creditors. However, you typically need a steady income in order to file for Chapter 13 bankruptcy. With Chapter 7, you do not necessarily need a job, but you do need enough assets to pay off a portion of your debts.
People, both young and old, may have so little regular income that filing bankruptcy makes the best sense. In these cases, negotiating payment plans and other options could be preferable. An attorney can help determine an appropriate path.