Get Advice from a Bankruptcy Lawyer in Glendora CA: Should All Debt Be Paid Before a Person Retires?

Get Advice from a Bankruptcy Lawyer in Glendora CA: Should All Debt Be Paid Before a Person Retires?

Almost a third of employees have savings of less than $1,000, and more than half have savings of less than $25,000, according to a new Employee Benefit Research Institute poll. Even more concerning, many people are carrying huge debt loads as they near retirement.

In fact, the households with the greatest levels of debt were those whose head of home was between the ages of 55 and 64, or in other words, close to retirement. In 2020, these households had an average income of $107,060.

This debt may originate from a number of sources, such as charge card debt, medical expenses, unpaid taxes, small business debt, mortgages, auto loans, and payday loans.

You’re not alone if you have debts of this nature and are concerned about organizing your finances in time for retirement. Only 27% of baby boomers believe they will have enough money for retirement, according to a study by the Insured Retirement Institute.

You do have alternatives, and bankruptcy can be one of them

There is good debt and bad debt for those who are approaching retirement, so it’s crucial to grasp this before you hurry to file those bankruptcy papers.

Working debt is another name for good debt. This essentially entails investments that develop a larger investment by putting your money to work for you. As long as it has a decent interest rate and you are not in the negative equity on the house, your mortgage is the ideal example. A mortgage can also provide tax advantages since part of the payments are deductible.

Any debt with a prohibitively high interest rate is considered bad debt. The ideal example is a credit card. Bad debt is frequently unsecure debt, which means there is no collateral used to secure the obligation.

Pay off bad debt first

The best course of action for your retirement plan is to prioritize paying off that bad debt first. Personal bankruptcy can be quite beneficial in the situation. You may be able to choose between a Chapter 7 bankruptcy, which has an income cap but allows for the total discharge of unsecured debts like credit cards and payday loans, and a Chapter 13 bankruptcy, which enables the creation of a court-approved repayment plan that can significantly lessen your obligations. Your options will depend on your income and assets.

Don’t put off talking about bankruptcy if you are worried about your money. Get in touch with Law Offices of Terrence Fantauzzi now to talk to a bankruptcy lawyer in Glendora CA.

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