Bankruptcy hits seniors the hardest

With a dwindling economy comes financial hardship. People from all walks of life are forced to deal with climbing debts and bills coupled with job loss. For many of these people the best option to resuscitate their finances is by filing bankruptcy.

This plague of too many bills and not enough income seems to have hit the senior community the hardest. Often swamped with overwhelming medical bills, seniors are filing for bankruptcy at a much faster rate than adults.

From 1991 to 2001 the rate of personal bankruptcy filings of those 65 years or older jumped by 150% according to research by the Consumer Bankruptcy Project. Experts believe the reason is in fact medical bills that many seniors are unable to pay with their limited retiree incomes.

When strict new laws were passed in 2005, bankruptcy filings were initially down, but have since risen again in response to economic struggle. The senior age group is still seeing the highest number of filings.

Bankruptcy is an important option for seniors as many lack jobs that can help them climb out from their piling debts.

Top five mistakes debtors make pre-bankruptcy

5. Pretending nothing is wrong. Once debts reach a point where your monthly income will not allow you to climb out from under your bills, there is a problem. Acting and hoping that one day you will figure out the best course of action, is in fact the worst course of action. Don’t discount bankruptcy as an option.

4. Deceiving creditors. Being honest with your creditors is the best policy. Often they will be able to help you by upping credit limits or lowering interest rates. By simply dodging creditors and lying, you may burn that business bridge.

3. Letting reserves deplete to nothing. Never use every penny to pay off bills. Always keep cash on hand. You stand a better chance of reorganizing and sustaining post-bankruptcy if have available reserves.

2. Being ashamed of bankruptcy. Bankruptcy does not hold the reputation it did decades ago. Not only is bankruptcy more common today, it serves as the only option for many people.

1. Going at it alone. Bankruptcy is a complicated legal proceeding that should always be handled by a qualified attorney. Don’t get lost in the legal jargon and fail to fix your finances. By allowing an expert attorney to file on your behalf you stand a much better chance of being free from debt.

Georgia Bankruptcy regulations still entitle debtors to assets

While federal laws govern bankruptcy, each state has further regulations that dictate bankruptcy filings.

The state of Georgia allows a debtor to keep some of their assets despite liquidation.

Debtors are still entitled to:

  • Veteran’s benefits
  • Payments from retirement accounts
  • Social security benefits
  • Unemployment compensation
  • Public Assistance
  • Disability or illness benefits
  • Pension and annuity payments
  • Alimony
  • Interest in any funds or property
  • Life insurance payments
  • Wrongful death payments

What to know about liquidation

Liquidation is the process of turning assets into cash. Liquidation is performed under Chapter 7 bankruptcy in which the debtor has made the choice to sell assets to pay off creditors.

The process begins when the court appoints a trustee who not only oversees the liquidation, but also distributes the funds to creditors.

Debtors should always reveal all assets in their possession, as hiding any assets from the courts will be seen as fraud and prosecuted as such.

Once all assets are discovered, non-exempt property is sold through various outlets, until it is all converted to cash. Based on the items being liquidated the process can be quick or prolonged.

Many believe that by choosing to liquidate it implies everything will be sold for profit. Both federal and state law prohibits this practice and insures each debtor does not lose everything.

1 in 8 mortgages in Georgia are delinquent or in foreclosure

Many unaware of chapter 13 effects

Georgia has become the center of the national housing crisis. “For sale” and “foreclosure” signs litter neighborhood yards like American flags on Independence Day. Families once happily renovating kitchens and retiling bathrooms on weekends are now desperately trying to save their homes.

Where “new and reduced price” often lead to bidding wars on homes, it is now an unfair fight between homeowner and mortgage company, with Goliath often beating David. Sales, prices and buyers are down, but foreclosures continue to rise.

Now that the bubble has burst, many are faced with the prospect of actually losing their homes. With only days from the day known as foreclosure Tuesday, many are unaware that all is not lost.

By contacting a bankruptcy law firm and filing for Chapter 13 you can keep your home and still get out of debt.

Chapter 13 bankruptcies allow those in debt to consolidate their debts into one bulk monthly payment. These payments are made to creditors over a period of three to five years or until the debt is completely paid off.

Bankruptcy law firms warn consumers not to believe the end is near for your home, action can be taken against foreclosures as late as the day before the bank is set to seize a home.

In this case, late is better than never when it comes to keeping your family in your home.

Georgia tops list of most foreclosures

In a state that normally tops lists of most beautiful places to live, best barbecue and most hospitable comes another list topper: most foreclosures in the nation.

Based research conducted by Georgia places number five in the most foreclosures in the nation. With the nation’s foreclosure listings at 2,934,626, more than 52,000 of them belong to the residents of Georgia.

The only states to place higher than the peach state were California with the most at more than 300,00; followed closely behind by Florida, Ohio, and Texas, respectively.

Conversely, Georgia did not place in the top ten of the number of Chapter 13 bankruptcy filings; an action which could stop the foreclosure of homes.

Chapter 13 bankruptcy filings are the best way to stop a bank or mortgage company from foreclosing on a home. Through this filing, the debtor is allowed to reorganize finances and pay back creditors. Upon filing, a “stay” is placed on a home, which will stop any foreclosure.

With barely 30 percent of those facing foreclosure filing for Chapter 13, the majority of these people will lose their homes.