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Debt relief through bankruptcy may help seniors keep their home
The financial problems faced by some seniors living in Tennessee and other states can be overwhelming. A couple in their mid-eighties who have amassed $50,000 in credit card debt and another $50,000 in medical bills, and with a home that is mortgaged, may find that the most sensible and effective debt relief remedy is a Chapter 7 bankruptcy. Prior to making the decision, however, the couple will benefit by consulting with an experienced consumer bankruptcy attorney to determine if they are qualified to file and what will be the impact of the filing.
Generally, the attorney will not recommend a Chapter 7 if the couple faces the prospect of relinquishing any significant assets. However, if the couple is qualified to file under Chapter 7, most persons in the foregoing scenario will not risk losing any income or assets, because there are substantial exemptions provided by law. The amount of equity in the home, however, may be relevant under the Tennessee homestead exemption, which the attorney will thoroughly evaluate prior to recommending a filing.
If they qualify to file, the Chapter 7 will erase the full amount of their credit card and medical bills debt, without any payment plans, penalties or similar obstacles. The permanent and fast elimination of unsecured debt in a Chapter 7 conforms to an overriding theme of federal bankruptcy law, which is to provide debtors with a fresh start. Of course, if there is a home that is exempt, the couple will keep it only by continuing to pay their monthly mortgage payments.
The couple had felt pressured to give up their home and seek low-rent housing because they could not pay the mortgage and the unsecured debt payments at the same time. After consulting with a consumer bankruptcy attorney regarding their debt relief options, they learned that their retirement income was not too high to qualify to file a Chapter 7 bankruptcy. They learned also that they could keep the house due to the small amount of equity in it, and at the same time totally wipe out their unsecured debt. They were also able to keep their automobile and personal belongings under other exemption provisions.
Source: latimes.com, “How to find your way out of difficult financial circumstances“, Liz Weston, Dec. 10, 2017
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608 Mabry Hood Road, Suite 202
Knoxville, Tennessee 37932
William E. Maddox, Jr. LLC, Attorney at Law is located in Knoxville, TN and serves clients in and around Knoxville, Oak Ridge, Louisville and Anderson County.
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