Once debt starts snowballing it can be almost impossible to get it to stop. To top it off, many consumers feel very alone when they realize what is going on with their finances. Struggling under the weight of too much debt is not at all uncommon, though, and many Georgia residents even turn to bankruptcy for help moving forward.
Bankruptcy and age
Anyone of any age, background or financial status can end up with more debt than he or she is capable of handling. However, people over the age of 65 are filing for bankruptcy at an increasingly faster rate than all other age groups. There are several reasons why this age group seems to be hit so hard by debt, including:
- High medical bills
- Limited retirement savings or income
- Fewer guaranteed pensions
Chapter 7 or Chapter 13?
Most consumers have just two options for bankruptcy — Chapter 7 or Chapter 13. Chapter 7 bankruptcy is only available to those who earn less than the median income in Georgia, and it wipes out a large portion of a person’s debts. This is often at the cost of liquidation of property, which is not necessarily a bad thing as the benefits of bankruptcy often outweigh having to part with certain assets.
Chapter 13 bankruptcy is an option for someone who earns more than the state’s median income. Although some debts are wiped out in this process, it is only after someone has completed a court-approved repayment plan that lasts anywhere from three to five years. However, those pursuing Chapter 13 can generally keep their property, including homes, vehicles and more.
Some people struggle with the idea of filing for bankruptcy after spending months or even years trying to get their finances in order. While understandable, this approach often results in someone digging him or herself even further into debt. Considering the potential benefits of bankruptcy — including discharged debts — this can be a more financially viable option for many people.