Elderly individuals sometimes have trouble making ends meet when living on a fixed income. Paying off living expenses and debts can be even more difficult when dealing with typical health problems that come with old age. Louisiana senior citizens and their loved ones might be interested in a recent court ruling that could have ramifications on seniors who file for bankruptcy.
The U.S. Bankruptcy Court for the District of Kansas confirmed a "fee-only" Chapter 13 bankruptcy plan for a couple in their 70s on Aug 5. The couple has health issues and is no longer employed. The fee-only plan covers expenses including attorney's fees and pays money from a dividend to unsecured creditors over a period of 36 months.
The pair involved in this case had around $2,100 in savings when filing for debt relief. They had credit card debt that totaled more than $50,000, and their monthly expenses were $2,728. The couple also supports an adult daughter who lives with them because she suffered injuries in a car wreck. The $93,000 mortgage the couple owes is exempt along with the $3,461 they receive monthly from Social Security.
The couple's bankruptcy trustee had concerns about filing for Chapter 13 as the couple qualified for Chapter 7. However, the couple wished to retain their savings instead of using it to pay the attorney in advance. In their Chapter 13 plan, they pay $125 to the attorney every month.
When unable to keep making debt payments, restructured plans might be available through bankruptcy. An attorney may help an individual understand the different types of bankruptcy options. While secured assets like a house could be exempt from foreclosure when filing for bankruptcy, nonexempt assets are liquidated to pay creditors with Chapter 7. This is one reason someone might find Chapter 13 more favorable.