Filing for Chapter 7 bankruptcy can help retirees find freedom from debt collector harassment.
Retirement is supposed to be a happy and relaxing time, but for many older Americans these so-called “golden years” are being tarnished by debt problems. Retirees who could just about scrape by in past years are finding it more difficult to make a fixed income stretch to cover their needs, especially in the face of rising costs of living. Throw medical bills into the picture and you can understand why many retirees are accumulating debt.
According to the Consumer Financial Protection Bureau, seniors complain more about debt collection than about any other financial product or service. In a recent analysis, one of every three complaints logged by the CFPB was about debt collectors. And seniors have plenty of valid complaints to make. Here are the top ones:
- Debt collectors repeatedly attempt to collect debts that do not actually belong to the senior—this includes debts belonging to deceased relatives as well as debts belonging to complete strangers or incurred due to identity theft
- Debt collectors try to collect on medical debts that are actually covered by insurance
- Debt collectors make harassing phone calls and use offensive language
- Debt collectors use scare tactics like threatening to garnish retirement benefits, place liens on property, or have seniors arrested
- Debt collectors take advantage of seniors that may have trouble managing their own finances due to memory or health problems
- Debt collectors cause stress that worsens older people’s health problems
If you are a retiree faced with collection activities, don’t just give in without exploring all your options. You can end debt collector harassment in several ways. First of all, you can seek legal representation in disputing any debts you believe are invalid. As soon as you hire an attorney for this purpose, debt collectors are required by law to contact your attorney about the debts, not you.
Secondly, you may want to consider filing for bankruptcy. For a senior on a fixed income, a Chapter 7 bankruptcy is often an excellent way to discharge medical debts, credit card bills, and other unsecured debts without losing any of your property. (Most of your personal property will be exempted from the bankruptcy proceeding under California law.)
Before you make up your mind to file for bankruptcy, be sure to talk to an experienced bankruptcy attorney. After all, if you do not own your own home and have no income other than Social Security or another type of federal benefit, you may very well be judgment proof. This means you have nothing that a debt collector can legally take from you, so you don’t actually need to file for bankruptcy to protect yourself.
