Am I Too Old To File For Bankruptcy? The Truth About Bankruptcy For Seniors


When it comes to questions about bankruptcy, one of the most common is whether age has anything to do with the benefit of opting for this course of action. It’s true that the circumstances of one’s life – including age – can make a big difference when it comes to how well bankruptcy will address the financial issues they might be facing. However, it is a common misconception that anyone is ever truly too old to choose bankruptcy.

Here’ what you need to know about how age impacts the bankruptcy process and what that process might look like for a senior citizen.

Can Seniors File for Bankruptcy?

The short answer is yes. Here is no legal age limit to filing for bankruptcy. A long as you are a legal adult, you are permitted to file. The concept of being “too old to file for bankruptcy” comes from the idea that doing so might not be beneficial for people over a certain age or at certain phases of life.

Senior citizens are typically homeowners who have a great deal more equity in their homes than younger adults do. This makes the scenario of considering a chapter 7 bankruptcy or similar debt relief solution very different than it would be for someone in their younger, working years. They have a lot more to lose if their home were to be surrendered in the bankruptcy agreement – and a lot less chance of regaining what they’ve lost than someone with many working years ahead of them.

However, there are a lot more factors at play for seniors considering bankruptcy than just this, especially in today’s world. Understanding the risk and reward comparisons is important in making the right decision. To do that, it pays to learn a little bit more about what bankruptcy means for seniors.

Why Some Seniors Opt-Out of Bankruptcy

It is very common for seniors to choose not to file for bankruptcy. Why? Because many people in this age group qualify as what is known as “judgment proof”. This means that they simply do not have enough eligible assets from which a creditor can seize repayment. While most seniors have some kind of income – such as Social Security benefits, retirement, or other sources – this income is often exempt from seizure by creditors in bankruptcy or otherwise. This means that many seniors choose not to go through with bankruptcy because they know that they can’t be pursued for repayment of their debts, anyway.

While most sources of income that seniors traditionally have are exempt from seizure, this doesn’t mean that every senior would be making a bad choice in filing for bankruptcy. In today’s world, more seniors are still working, and for longer periods of time than ever before.

This means that more seniors have a traditional, non-exempt source of income, which also means that for someone in this age bracket struggling with overwhelming debt, bankruptcy might not be a bad choice after all. As with anything related to bankruptcy, it is important to take every factor into account when making your decision.

Case in point, the opposite of having too few assets can also be an issue when you file for bankruptcy. If a senior has a lot of assets, filing for something like chapter 7 bankruptcy can mean potentially losing those assets. In states like Florida, your primary property will likely be exempt due to the state’s generous homestead exemption, but other assets may not be. In this circumstance, finding another road to debt relief or management might be the best option for a person over 65.

When Should a Senior Choose Bankruptcy?

So, if there are so many reasons to avoid bankruptcy as a senior, when should a person in this age bracket opt for bankruptcy? Is there ever a reason for a senior to file for bankruptcy?

The first and foremost reason for a person of any age to consider filing for bankruptcy is the disruption of everyday life or a negative impact of the quality thereof. While many people can ignore lingering debt – even when it becomes substantial – others cannot. If that debt is becoming a source of major stress or is impacting your quality of life, filing for bankruptcy might be in your best interest regardless of your age.

Another reason many seniors who choose bankruptcy do so is that they are looking to discharge that debt. When it comes to wiping out your debt and restoring your peace of mind, medical debt and credit card debt are two of the easiest sources of debt to discharge. Coincidentally, these two debt sources are also the most common for modern seniors. As such, many seniors who opt for bankruptcy do so to wipe out these debts and give themselves more peace and less stress to enjoy their golden years with.

Are There Other Options for Seniors?

With all of this back-and-forth discussion of the pros and cons of bankruptcy for senior citizens, you may be wondering if there are other options. As is the case for anyone, there is almost always a list of options that can help with your debt, regardless of your age and life stage.

For seniors, this may include debt settlement programs or negotiation. These relief options can help you manage debt repayment without significantly impacting your everyday life.

However, they may also not be enough to address your debt if the total amount is very high, so be sure to discuss all of your options with a professional.

Are you considering bankruptcy? Are you worried about whether it is the right choice for you, given your age, income, or other factors? Do you need knowledgeable guidance and advice on the bankruptcy process? Contact  Van Horn Law Group.