Recently, I read an article published in the American Association of Retired Persons AARP MAGAZINE in the May/June 2009 issue entitled “When Bankruptcy is Smarter!” by Walecia Konrad. The article discusses that when people are in trouble, they often wait too long before seeking assistance. The AARP article referenced above advises against draining retirement and savings accounts to pay debts, but rather to first consult with an experienced bankruptcy attorney.
For longer-term Washington state residence, one can usually have in excess of $120,000 home equity…and still file to extinguish debts through bankruptcy. The amount of funds one can retain in IRAs and 401k plans is also very, very liberal–particularly if a person is of middle or later age.
In evidence of a worrying trend, American adults age 55 and over experienced the sharpest increase in bankruptcy filings of any age group since 1991, according to a recent study conducted for AARP’s Public Policy Institute, writes AARP’s Jonathan D. Pond on October 14, 2008
AARP’s Mr. Pond notes that not only in Washington state, but across the country, that while the bulk of bankruptcy filers are in their 30s and 40s, Americans age 55 or older have experienced the sharpest increase in bankruptcy filings, accounting for 22 percent of all those in bankruptcy proceedings in 2007. That number is up from only 8 percent in 1991.
A weak economy and increasing health care costs put older Americans, regardless of whether they live in Washington State or not, at greater risk for bankruptcy. Health care expenses can be one of the biggest, if not the biggest, causes of bankruptcy among older Americans. This will affect all senior Americans, not just those residing in Tacoma, Gig Harbor, Bremerton, Puyallup, Chehalis, or Olympia.
Do yourself a favor: Listen to the AARP: Before draining assets or selling property to pay credit cards, medical bills and other debts, first consult with an experienced bankruptcy attorney. You may save yourself much grief, and tens of thousands of dollars.