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Bankruptcy among older Americans is growing

Thinking too much about retirement will make anyone nauseous. With so much to plan for and so little certainty, the mere thought of retiring is unsettling. Further, with more older Americans than ever struggling with credit card debt, mortgage debt and student loans, the rate of bankruptcy among adults over 55 is climbing. Because of this, Tennessee residents may be interested to learn about qualified retirement accounts and bankruptcy exemptions.

According to the AARP, nearly one quarter of all personal bankruptcy filings in 2011 were made by people 55 years old or up. This is a four percent increase from 2006. Furthermore, if the large percentage of Americans over 55 filing for bankruptcy was not bad enough, the total number of bankruptcies during this time period increased about 134 percent. This means that in 2011 there more than 350,000 American seniors who filed for bankruptcy.

While this is certainly disconcerting news, there is a bright side. For one thing, in the United States there are bankruptcy exemptions. A bankruptcy exemption refers to certain property or assets that are exempt from creditors during the bankruptcy process, and there are both state exemptions and federal exemptions. Further, bankruptcy exemptions differ depending on whether a person is filing for Chapter 7 bankruptcy or filing for Chapter 13 bankruptcy.

The different types of exemptions that individuals can take advantage of include homestead exemptions, which protect the equity in a person's home, as well as personal property and automobile exemptions. Most importantly for older Americans there are exemptions for qualified retirement accounts. For older Americans facing financial challenges, learning more about these exemptions may help ease some of their concerns.

Source: CBS News, "Why traditional retirement is dead," Steve Vernon, Feb. 4, 2013

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
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