Excessive debt and the possible need for bankruptcy can happen to people of all ages, including retired individuals and senior citizens. Unfortunately, the number of senior citizen bankruptcies is constantly on the rise due to many factors such as the poor state of the economy, the rising costs of healthcare and of prescription medications that many seniors rely upon, poor planning for the future, or simply not having taken care of debts sooner. There are, however, some things that senior citizens should be aware of when considering filing for bankruptcy.

Firstly, there are many organizations that exist to help seniors seek out alternatives to filing for bankruptcy. Credit counseling or debt consolidation is recommended for many situations by the Association for the Advancement of Retired Persons. Whenever possible, senior citizens will want to avoid filing for bankruptcy as this will have a negative effect on their credit and potentially on the savings or other assets they have worked their entire lives to obtain.

When debt consolidation or credit counseling is not an option, senior citizens may be able to initiate a “take no action” approach. As the name implies, the senior can simply continue paying his or her debts in amounts or in a time frame that is possible and easy for the individual to do. While he or she will not meet the demands of the creditors, it is likely that no legal judgment will be filed against the individual. However, this is not a foolproof plan and should only be embarked upon if the senior citizen is retired or has no income and no assets that can be seized. The reasoning behind this approach is that many creditors will not obtain a judgment against debtors who have no resources or assets, because they know that they are not likely to receive any payments. It is always best, however, for senior citizens to check with an attorney or other legal and financial advisor to determine if the “take no action” approach will be beneficial for their particular situations.

When all other options have been thoroughly examined and will simply not serve as a solution to a senior’s debt, the individual may have to go through with the bankruptcy proceedings after all. Seniors will want to try and find a trustworthy attorney who will be able to help them understand this situation and file for the type of bankruptcy that will be the most beneficial for them. In some cases, attorneys may even be able to find loopholes in the debts owed or make other arrangements to avoid bankruptcy altogether. For this reason, it is important that seniors always seek some kind of outside help and that they do not try to go through the bankruptcy process on their own. It is unfortunate that senior citizens who have worked hard all their lives have to worry about financial pressures, but approaching the situation intelligently and correctly can help these individuals to avoid bankruptcy altogether or to have a positive and even beneficial experience with bankruptcy proceedings.