Much like homeownership, a comfortable retirement is looking more and more like an outdated aspect of the American Dream. Most people leave the workforce and start drawing Social Security, not because they have enough money saved to pay their expenses until their 100th birthday, but because they are no longer healthy enough to work, and many of them reach that point sooner than they expected to. One economist says that you will probably retire at the midpoint between your 61st birthday and when you had hoped to retire, so if you had planned to retire at age 67, you will instead retire at age 64. 

To make matters worse, the amount you get in Social Security does not go nearly as far as it used to, especially if you start drawing Social Security before you are 70. You might try to console yourself with the knowledge that Medicare will make your healthcare much less expensive than it currently is, but even with Medicare benefits, you can still end up with medical bills that are enough to wreck your finances. The good news is that everyone, regardless of retirement status, has the right to file for bankruptcy protection.  If you are retired and struggling with medical debt or other debts that you cannot pay, contact an Oakland Chapter 7 bankruptcy lawyer.

Common Reasons Why Retirees File for Bankruptcy

Medical debt is a main factor in many bankruptcy filings, including when the applicant is retired. Medicare pays for some medical expenses, but not all, and medical debt that you incurred before retiring can continue to follow you around for years. Even worse, Medicare does not cover dental expenses, except in the direst situations, like if a patient needs it as a prerequisite for chemotherapy or heart valve surgery or if the patient is currently hospitalized with facial injuries or oral cancer. Think about how much those bills for fillings and root canals hurt now, and then imagine trying to pay them if you didn’t have your job and only had Social Security income. Discharging those medical and dental bills in bankruptcy can make your retirement less stressful.

Many retirees also have student loan debt either left over from their own studies or because they borrowed Parent PLUS loans to help pay for their children’s education. Discharging federal student loan debt in bankruptcy is not so easy, but filing for bankruptcy can enable you to discharge the debts that are eligible so that there is more room in your budget for your student loan payments.

With the rise of gray divorce, many seniors struggle with alimony obligations. You cannot discharge alimony in bankruptcy, but you can discharge other debts to free up funds to pay your alimony. You can also petition the family court to modify your alimony order to reflect your current retired status.

Contact the Law Office of Melanie Tavare About Dealing With Debt After Retirement

A debt relief lawyer can help you assess your debt situation when you are retired and no longer have employment income. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a case evaluation.