Just as you are never too rich or poor to file for bankruptcy, you are never too young or old. The stereotype that a lot of people hold is that people who file for bankruptcy are men in their 30s or 40s who, after a recent divorce, got stuck with a disproportionate share of the marital debt, which they cannot pay, especially since the court has also ordered them to pay child support and, in some cases, alimony. These bankruptcy filers have employment income and reasonably expect to be able to rebuild their creditworthiness after discharging the debts that they cannot afford to pay, even if, after a few glasses of wine, their ex-wives may say, “Eight years from now, the court will be seeing him again for another divorce and another bankruptcy case.”
As most Americans are painfully aware, debt and financial hardship can happen to you at any age. In some cases, people above the age of 50 are the ones who stand to benefit the most from filing for bankruptcy since they cannot rely on the expectation that they have decades ahead of them in the workforce. If you are old enough that you cannot afford to procrastinate on your estate plan but are struggling with so much debt that you are considering filing for bankruptcy, contact an Oakland Chapter 7 bankruptcy lawyer.
Your Estate Plan Can Affect Your Bankruptcy Filing
When you file for bankruptcy, you must present a detailed account of all of your assets, as well as your income and debts. In a Chapter 7 bankruptcy case, the bankruptcy court has the right to sell some or all of your non-exempt assets in order to put the proceeds toward debt repayment.
As every estate planning lawyer knows, assets that belong to a trust no longer legally belong to the grantor of the trust because the trust is its own legal entity. Therefore, they encourage seniors to establish revocable trusts so that the assets in the trust will not become part of the estate when the grantor of the trust dies. In other words, people use trusts to hide from creditors during probate, and this is perfectly legal.
While this is a popular and perfectly valid estate planning strategy, it can cause problems if you decide to file for bankruptcy protection. The mere existence of a trust is not enough to cause the court to reject your bankruptcy case or refuse to discharge your debts, but it can raise red flags. If you established the trust a short time before you filed for bankruptcy, the court will likely reject your case. The trust is less likely to cause problems in your bankruptcy case, though, if you established it years ago, before the unexpected financial hardship that caused you to decide to file for bankruptcy.
Contact the Law Office of Melanie Tavare About Bankruptcy Cases
A bankruptcy lawyer can help you find the best way to discharge your eligible debts, regardless of your age. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a free case evaluation.
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