Arkansas residents used to look forward to travel, grandchildren and hobbies in their golden years. Unfortunately, today, many seniors have overwhelming debt due to medical bills. If you struggle making minimum payments, bankruptcy may buy you some much-needed breathing room at Robertson, Oswalt, Nony & Associates, we often help clients find solutions to their debt challenges.
According to SmartAsset, there are two types of bankruptcy protection for consumers. There is no limit to the debt you can eliminate with Chapter 7. However, you may have to liquidate assets with the proceeds sent to creditors as part of the discharge. Although you can keep your assets with Chapter 13 you must commit to a repayment plan over the next three to five years.
If you file for Chapter 7, you must show your ability to repay debts based on your household income, how much you owe and monthly expenses. Social Security benefits are not counted as income for the means test, so you may qualify easier if you receive funds from a pension or retirement savings account. If you do not pass the means test, you may file Chapter 13 instead.
There are several requirements regarding the way bankruptcy affects your assets. You may exempt a certain dollar amount on items such as work-related vehicles, equipment and home equity. Homestead laws allow you to exempt a specific amount of equity. An attorney can help you determine whether you qualify for discharging debts under Chapter 7 or Chapter 13 and if your assets are at risk. Visit our webpage for more information on this topic.