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Chapter 13 can be useful even as retirement approaches

By the time Washington, D.C., residents reach retirement age, they often expect to be financially solvent, without crippling amounts of debt. Although this expectation exists, a growing number of debt reorganization experts say that they are seeing older borrowers seeking help for financial problems. These professionals say that there are several debt management options that can help even retirees get a fresh financial start.

One credit union reports that 65 out of 99 clients with reportable delinquent loans chose to consolidate debts through Chapter 13 proceedings. A smaller number opted for Chapter 7 bankruptcy, which is also known as liquidation. In Chapter 13, clients are able to reorganize their debts to seek a more manageable monthly payment; Chapter 7 involves the complete discharge of those debts.

Credit union professionals say that they are encountering some alarming statistics during financial planning seminars. Informal analysis shows that household credit card debt often eclipses $15,000. Although credit union leaders admit that they want clients to borrow from their organizations, they say they worry about the potential for Chapter 13 bankruptcy among members, who may have their relationship with their credit union severed because of this process.

Clients who are concerned about the financial burden imposed by their credit card and other loans such as mortgages and car notes may benefit from the advice of a Washington, D.C., bankruptcy attorney. These professionals may provide additional information that can help clients choose the right type of bankruptcy for their financial situation. Even if you are nearing retirement, you may be able to salvage your financial status by pursuing legal options through local courts. A bankruptcy attorney can be a valuable ally throughout these proceedings.

Source: Credit Union Times, "Balancing Growing Loans, Shrinking Debt" Michelle A. Samaad, Mar. 30, 2014

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