Filing for Bankruptcy: Are You Ever Too Young or Too Old?
If you fall in one of the age extremes, you may be wondering, “Are there age restrictions to filing for bankruptcy?” The answer usually is that no matter your age, it's the specifics of your situation that determine whether bankruptcy is the best option.
The Legal ViewYoung adults and senior citizens likewise are legally able to file for bankruptcy. Of course, just because something is legal does not always mean it's a good idea, or that they will be granted the bankrupt status.
There are several different bankruptcy options referred to as "chapters." The most common bankruptcy chapter for young adults would be a Chapter 7 or Chapter 13 filing. Also, you have to be granted a bankruptcy ruling by the court.
Why young people might fileMany people in their 20s and early 30s file for bankruptcy because of student loan debt, credit card debt, and even medical debt. The good news is that after the fresh start that bankruptcy may provide they have the rest of their lives to practice wise personal financial management. That said, many types of student loan debt do not get discharged, and medical bills can continue to be expensive.
Why senior citizens might fileA big reason why senior citizens take into account filing for bankruptcy is their medical expenses. Senior citizens may also have been struggling with staying financially afloat after a divorce or after entering retirement and not having a job. They might even be in dire financial straits after being lured into a scam. For the most part, retirement accounts and pension plans are exempt from creditors. However, to file for Chapter 13 bankruptcy, you typically need a steady income. With Chapter 7, although you do not imperatively need a job, you do need enough assets to pay off a portion of the debts.
People, both young and old, may have little regular income. In these cases, it could be preferable negotiating payment plans and other options. An attorney can help determine an appropriate path.