Unfortunately, the economy has pushed many of our aging citizens into tough decisions over their finances. While many have turned to the “working retirement” to make ends meet, many others have faced reverse mortgage challenges and the need for bankruptcy to help resolve debt troubles. For our elderly, financial hardship can pose unique challenges.
As each generation ages they face additional barriers that previous generations did not. With Social Security no longer offering the level of assistance needed to sustain living expenses, debt in retirement is becoming a growing problem. Reverse mortgages are one way the retired have obtained cash in time of need, but these are often tricky and can leave the estate penniless when the time comes to collect.
The bottom line is debt is collectible more often than not, and too many people fail to take care of their debts before passing. If a person leaves debts behind after a passing, the estate becomes the responsible party. This means that creditors can stake claim to any survivorship benefits, assets, or fund accounts that belonged to the deceased. The family then is responsible for managing creditor claims to ensure the debts are satisfied.
Filing for bankruptcy either before a passing, or on behalf of the deceased, can eliminate debt liability in many cases. Through bankruptcy, debts can be resolved or repaid and protect any remaining assets, funds and survivorship benefits. This is because bankruptcy exemption laws often protect much of a person’s estate, including retirement funds, insurance policies and the like.