November 17, 2019

Bankruptcy and Retirement

Here you are in your golden years and you’re also in overwhelming debt.  The question now becomes “what should you do?” If you have retirement savings, you can use that to pay down debt, but then you won’t have anything left to live on.  Or, a smarter choice, would be to keep your retirement savings, protect your pension(s) and/or retirement account(s), and declare Bankruptcy.  This is also a very wise decision if you do not have retirement savings or pensions and you are counting on social security benefits only to support yourself and your family.

Some people are under the misconception that when they reach retirement age, they become what is known as “judgment proof.”  On one hand this is correct and on another hand it is false.  Creditors can still sue you for delinquent accounts and secure judgments against you even if you are over 62 and/or retired.  If you are sued and lose, and then you fail to pay the court-ordered judgment amounts then the creditors can serve you with executions of the judgment and they can sweep your bank accounts.  You will then have the right to request the court to “exempt” the funds if they were derived from social security, pension or retirement funds, and eventually have the funds returned to your account.  Creditors cannot get attachments on your benefits from social security, pension or retirement accounts, but they can put liens on your property.  Therefore, you are not fully protected or “judgment proof” just because you are retired and no longer have “wages.”

The alternative to this dilemma is Chapter 7 Bankruptcy.  If you are living on pension funds and/or social security benefits, you will likely qualify easily for Bankruptcy, and your social security benefits, pensions and retirement accounts will be totally exempt in the Bankruptcy process.  Ultimately, Bankruptcy will give you a “discharge” of your debts and you will be relieved of your obligation to pay your creditors.

Bankruptcy can also help you with delinquent or unpaid utilities, and foreclosures, as well.

Filing Bankruptcy in your golden years can help you wipe the slate clean so you can enjoy your retirement and have peace of mind.

Please contact Attorney Theresa Rose DeGray for more detailed information and a free consultation to discuss your specific situation at 203-713-8877.

Social Security and Your Retirement Plan

Social Security is part of the retirement plan of almost every American worker. If you’re among the 96 percent of workers covered under Social Security, you should know how the system works. You should also know how much you’ll receive from Social Security when you retire…this basic information on Social Security retirement benefits isn’t intended to answer all questions. For specific information about your situation, talk with a Social Security representative.

How do you qualify for retirement benefits? When you work and pay Social Security taxes, you earn “credits” toward Social Security benefits. The number of credits you need to get retirement benefits depends on when you were born. If you were born in 1929 or later, you need 40 credits (10 years of work). If you stop working before you have enough credits to qualify for benefits, the credits will remain on your Social Security record. If you return to work later, you can add more credits to qualify. We can’t pay any retirement benefits until you have the required number of credits.

How much will your retirement benefit be? We base your benefit payment on how much you earned during your working career. Higher lifetime earnings result in higher benefits. If there were some years you didn’t work or had low earnings, your benefit amount may be lower than if you had worked steadily. The age at which you decide to retire also affects your benefit. If you retire at age 62, the earliest possible Social Security retirement age, your benefit will be lower than if you wait.

You can now easily set up a secure online mySocial Security account. This allows you to access your Social Security Statement to check your earnings and get your benefit estimates. You can also use your online mySocial Security account to request a replacement Social Security number card (available in many states and the District of Columbia). If you receive benefits, you can also: Get your benefit verification letter; Change your address and phone number; Request a replacement Medicare card; Get a replacement SSA-1099 or SSA-1042S for tax season; or start or change your direct deposit. You can create a mySocial Security account if you’re age 18 or older, have a Social Security number, a valid U.S. mailing address, and an email address. To create an account, go to www.socialsecurity.gov/myaccount. You’ll need to provide some personal information to confirm your identity. You’ll be asked to choose a username and password, and then you’ll be asked for your email address. You’ll also need to select how you would like to receive a one-time security code — to a text-enabled cell phone or to the email address you registered — that you will need to enter to finish creating your account. Each time you sign in with your username and password, we will send a one-time security code to your cell phone or to your email address. The security code is part of our enhanced security feature to protect your personal information. Keep in mind that your cell phone provider’s text message and data rates may apply.Get personalized retirement benefit estimates. You can use our online Retirement Estimator to get immediate and personalized retirement benefit estimates to help you plan for your retirement. The online Retirement Estimator is a convenient and secure financial planning tool that eliminates the need to manually key in years of earnings information. The estimator will also let you create “what if” scenarios. You can, for example, change your “stop work” dates or expected future earnings to create and compare different retirement options.For more information, read the publication, Online Retirement Estimator (Publication No. 05-10510), or visit our website at www.socialsecurity.gov/estimator.

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This firm is a debt relief agency. We help people file for bankruptcy relief amongst other things, under the Bankruptcy Code.