In my practice, I see it all the time: an elderly couple come to talk about their debts. Inundated by credit cards and living on a fixed income, they see no help in sight.
But, their retirement can’t be garnished and the credit industry can’t get at it (in most cases). Social security is almost completely protected from creditors. And, so is the house: a credit card company can’t force you to sell your home even if you owe them a lot of money. At least not in California, and, I would guess, most other states as well.
So, what possible benefit can there be to an elderly couple to file bankruptcy? Here are four good reasons why not to file:
1. It’s humiliating. We were all taught to pay our debts; and no one wants his or her neighbors to know that they can’t handle their economic obligations.
2. It costs money. The attorney and the court have to be paid.
3. It “ruins” a perfectly good credit score.
4. It sets a bad example for the children.
Those are very good reasons not to file; but the benefits far outweigh the detriment. Four of the many advantages to filing a bankruptcy:
1. It stops the collection calls and letters.
2. It will, ultimately, improve your credit score.