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Tough Calls in Golden Years: The Debt Dilemma
Episode 1714th September 2023 • The Miller Law Chronicles • Attorney James Miller
00:00:00 00:15:23

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Welcome back, friends, it's Attorney Jamie Miller once again. Today on The Miller Law Chronicles, we're tackling a financial dilemma that's keeping our seniors awake at night - to file, or not to file, for bankruptcy. As we sift through the implications, the potential threats, and the bigger picture, remember, these are not decisions taken lightly. Tune in for real-life examples from case files, free consultations, and the wisdom to make an informed decision. Don't miss this empowering episode. Wake up your brain cells and let's unravel this complex issue together.



With inflation and increasing prices and social security being flat, we are seeing seniors get into financial struggles. In increasing numbers, and it's becoming more and more of an issue that needs to be addressed. And that's why today we're going to talk about, well, should they file bankruptcy or should they not?

ways a clear cut decision in [:

Subscribe to us on YouTube, Subscribe to us on Google podcasts, and also on YouTube or Google, all the different podcast platforms that you can appreciate you listening in and I think you'll find this one very informative and really to the point. Thank you.

rs, we hear at the firm have [:

People on fixed income that for one reason or another have had mounting debt. It's generally unsecured debt, credit card bills, medical bills, utility bills. And we've been really trying to work with our senior clients to help them. Make the best decision that works for them for their families.

Many times I will get calls from kids of seniors. The seniors are struggling. Kids that have been helping their parents and just trying to look for a solution that works for our clients. And so, you know, there's, it's really a case by case basis. There's no hard and fast rule.

meone comes in and they have [:

Number one, do you own real estate? And owning real estate is a really important consideration and almost always drives the decision on whether or whether or not to file for bankruptcy. So if we have a client that owns real estate and they have $30,000 in credit card debt and they're falling behind on that credit card debt, we want to know if they have real estate.

Because if they do have real estates and they fall behind on those. debt, the unsecured creditors are going to sue our clients. And then when they sue our clients in the state of Wisconsin and get judgments, meaning that they have an order from the court in the form of a judgment that says our client needs to pay that debt.

Very importantly, [:

From the sale of the home. It's really important. And give me an example. I had a friend call yesterday and had questions about his mother and father. His mother and father are on a fixed income. They owe about $35,000 in credit card debt. They're paying the minimum payments. They no longer have the ability to pay the minimum payments.

beyond that. They don't own [:

But the big thing is that the senior is really not collectible. The credit card company or the medical bill company who took a judgment is not going to be able to garnish the social security. Since there's no real estate, that real estate is not going to be attached via a judgment lien. So the option for that particular client is file bankruptcy, keep the creditors off their back.

client wasn't interested in [:

That just didn't make sense. Let me tell you another story. I had another client, I just talked to them today. Elderly man lives in Northern Wisconsin, lives on a lake in Northern Wisconsin, has a home on the lake that is worth about $400,000 and owes about 150,000 on the home. So, according to the exemption laws of Wisconsin, I would not be able to file bankruptcy and protect the equity in that home.

n the home. The equity would [:

I don't want to get too complicated here, but in a chapter 7, let's say that they had $50,000 in debts and they had $100,000 of equity in the home. If they file a Chapter 7, the court is going to take the home, use the proceeds to pay off the debt, and return the rest to the client. But essentially in a Chapter 7, the client's going to have to pay with the proceeds from the home 100% of the debt.

if they did a chapter seven, [:

So they could do a chapter 13 and say, I'm going to pay back my creditors, through a chapter 13 repayment plan, an amount equivalent to what they would get if I did a chapter 7. So we know if we did a chapter 7, that the creditors would get 50,000. So therefore we would pay $50,000 back through a chapter 13.

Now that's going to amount to a payment. $800 a month ballpark, which is an amount which is too much for the client to afford on that fixed income. So the conversation that we had with the client and their children was, listen, there's $50,000 in credit card debt. We're going to send letters to those creditors and try to keep them off the back of our clients as long as possible.

The goal in [:

Not a problem. Thank you for that information which is you know, great, but I also was very clear with them. That if I get a creditor that takes a judgment today, that judgment is going to collect interest. So although there may be a judgment for $10,000 today, that judgment interest could climb to the point when they sell the home where it could be 20, 30, $40,000.

have to make sure that we're [:

So when we talk about different options, it's file or don't file, right? So don't file, we'll keep the creditors off your back as long as we can. And we're there to support you along the way. Chapter 7 and potentially lose the equity in the home if there's real estate chapter 13 to pay off the debts to pay off the amount that the creditors would get in a chapter 7.

in debt, [:

We also have something in Wisconsin called Chapter 128, which is a repayment plan where you can pay back your debts in full over a period of time of up to three years. So if the debt's low enough, say it's $10,000, you could end up with a monthly payment of $250 a month through a chapter 128, which is a repayment plan following state of Wisconsin rules.

lies that we talked to we we [:

So we're always going to outline the potential risks. That's something that we're going to talk about of whatever action they take. We discussed the impact on credit score and collections and that type of thing. And I just can't reiterate enough how important it is to seek financial advice and to seek legal advice.

Talk to your accountant. Talk to your lawyer. We're here to do whatever it takes to give you the best information possible. The first consult is free. I'd urge you to take advantage of that. And we're always here to give you practical tips on how to manage your finances.

ts or that your own finances [:

Sometimes the internet doesn't have all the answers. Take advantage of our free consultations here at Miller Miller. And I'd encourage you, reach out, ask questions. And we're here to do everything. And I want to take this moment. To thank you so much for listening in to this podcast on how to help seniors navigate bankruptcy and when to file and when not to.

It's a topic that [:

We know that the legal process can be confusing and scary and know we here at Miller and Miller are committed to giving you options. We're not here to tell you what to do. We're here to lay out on the table options for you to consider so that you are empowered to make a decision that works best for you.

ening in and look forward to [:

Thank you.