Bankruptcy Can Help Older Americans Take Control of Their Lives
I highly recommend this great article in the New York Times about bankruptcy and the elderly. Everyone should understand the issues related to protecting your own or your parents’ hard earned retirement funds when faced with a financial crisis. A good percentage of every client I meet has dipped into their retirement funds to pay off debts, only to find the debts never end – default interest, late charges, attorney and collection fees…… the list goes on and on.
Bankruptcy can bring much-needed relief from debt brought on by medical expenses or helping needy children…
The following is a brief clip of the entire article.
For some older Americans, bankruptcy can bring much-needed relief from debt brought on by medical expenses or helping needy children, and experts say it can be a valuable tool to protect retirement assets, after negotiating with creditors. But with reliable statistics on current bankruptcies hard to come by, anecdotal evidence suggests that shame at being in financial turmoil frequently prevents retirees from getting help early.
“People usually postpone bankruptcy for several years before filing,” said Deborah Thorne, an associate professor of sociology at Ohio University, who has studied older Americans and bankruptcy. “When finances head south, they should file right away.”
By spending retirement assets, Ms. Thorne said, retirees risk a downward financial spiral from which they are less likely to recover than younger people. A better strategy is to defend assets at all costs, she said.

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
In Case You Missed It
Published On: April 9, 2025
Many people, including inexperienced attorneys, think that bankruptcy is simple. To quote a first-year law student on their first day in bankruptcy class, "It is just filling out several forms." On the last day of [...]
Published On: February 23, 2025
The National Consumer Law Center (NCLC) is warning that the Trump Administration's actions to shut down the Consumer Financial Protection Bureau (CFPB) will devastate working families, honest businesses, and the economy. "Millionaires and billionaires are [...]
Published On: February 23, 2025
U.S. credit card debt reached a record $1.17 trillion In the third quarter of 2024, U.S. credit card debt reached a record $1.17 trillion, a significant increase from $770 billion in early 2021. This surge [...]
Published On: February 17, 2025
Reprint from the IRS website: Presidents Day weekend is peak time for IRS phone traffic. Skip the wait by visiting IRS.gov. IR-2025-22, Feb. 12, 2025 WASHINGTON — With the 2025 filing season underway and the [...]