Filing for bankruptcy can provide debt relief for men and women who are having serious financial struggles. Many people don’t know that some individuals are not obligated to file for bankruptcy to receive debt relief. Legally, they are considered judgment-proof. During a free consultation, a Bankruptcy Lawyer In Puyallup Wa can explain how this works.
Judgment-Proof
This legal aspect applies to people who are not working and do not have a significant amount of assets that creditors can seize. Creditors cannot garnish the wages of someone who is not working. They have no recourse because, if they sue the person who owes them money, that person has no way to pay the debt. Failing to pay bills is not a crime in the United States, so people are not sent to jail for this behavior.
Senior Citizens
A person of any age can be judgment-proof. Often, it’s senior citizens who have been struggling financially and are not required to file for protection with a Bankruptcy Lawyer In Puyallup Wa. They may be living on a modest amount of Social Security and not have a pension or retirement account. A serious medical issue may have wiped out any savings they had. They live in a senior community apartment and do not own real estate.
Chapter 7
If a person age 65 or over needs to file for bankruptcy protection, this can be done with the help of a lawyer such as Rafal Gorski. Filing will protect the person’s home and primary vehicle as long as those are paid for or the payments are current. Retirement accounts are exempt from collections activity. Chapter 7 discharges all qualifying debts, although if there are other assets, the person may need to use them to pay as much debt as possible before the rest is discharged.
Chapter 13
Another option, Chapter 13, is a repayment plan instead of a debt-discharge program. However, this may not be appropriate for retired seniors since the plan requires a high enough income to pay back the debts within five years. Social Security income may not be enough for that, especially when the person is having money deducted for Medicare.
