Does bankruptcy make sense for a retired senior citizen?

One of the most common reasons for bankruptcy is an overwhelming amount of medical bills, which people tend to collect as they age. Many try to pay it off with credit cards, but do not have the money to make more than the minimum payment for several years. This leads to massive credit card debt, which is another major reason for bankruptcy. In addition, retirement income is typically an exempt asset, so seniors do not have to worry about losing it when they declare bankruptcy.  Therefore, senior citizens often have a few good reasons for taking this financial route.

Most retired seniors live on a fixed income, making it hard to pay their current bills, let alone their past debts that are overdue. For this reason, bankruptcy not only makes sense for many retired seniors, but it may be their only option. Unlike people who are not retired yet, seniors do not have to worry about using their retirement benefits to pay off creditors, since Social Security income, IRA accounts and pensions are all considered exempt property. As always, a lawyer's advice should be sought before taking this step.