The golden years- a period of relaxation, plenty of money, lots of travel and the freedom to play golf and fish everyday right? For many of our Minnesota seniors, the retirement years don’t look anything like this. In fact, for many seniors there is nothing golden about chronic pain, no money, lots’ of debt, and with that the freedom to do very little.
Debt: The New Worsening Retirement Problem in Minnesota
It breaks my heart to see older Minnesotans come into my office with overwhelming debt and the accompanying stress associated with it, when they have worked their entire life to get to a placed of supposed nirvana. We all know what a desert mirage is and I suppose the same thing can be said about the “golden years” for so many of our older citizens. How many of us work like dogs for 40-50 years to get to this place called retirement?
I think for me that is the most painful part of all of this. This idea that you should put off happiness, work for decades like a dog, and then you can finally get to a place where you can do what you want and be happy. What? That sounds like a complete crock of crap to me.
Instead, I prefer to live my life “as if” I am already retired. I remember watching a show one time where they did a little documentary about this young man who graduated from high school and moved to Alaska. He built a small cabin in the woods and lived off the land. His friends thought he went off the deep end and wondered if their friend had completely lost his mind. What is he doing with his life? He is going to hunt and that is it? Why wouldn’t he go to college and get a degree or start a career and save boat loads of money for retirement?
This young 18-year old responded to all of his friends and critics this way: He said, I can’t work in an office environment because that is not who I am. I would suffocate in an environment like that and wouldn’t make it for 8 hours much less 40 years. I was not cut out to go to college and can’t imagine spending 4 years in college sitting at a desk. That is not me. Instead, I decided to move to the wilderness and live in a cabin and do what I love to do- hunt, fish, and live off the land. That is my dream.
Since this is my dream, I thought to myself, should I wait 40 years to do what I really would love to do with my life or should I do it now? Should I work a job I hate to do what I want to do in 40 years or should I do what I love to do now!? He said, for him, it was an easy decision. He said I choose to retire first and live my life as if I were retired.......drop the mic..............
This young guy is absolutely brilliant! Of course you should do what motivates you from the start. Of course you should develop 3-5 core values and do nothing but live by your core values your entire life- and from the beginning on!
Why don’t they teach this stuff in high school? Math, English, science, art etc are all wonderful and should be taught. However, I wonder why we don’t teach our children 1) how to control your emotions, 2) how to control your anxiety, and 3) what the hell are your core values?
What makes you get up in the morning and shout- “bring it on, I am so damn excited to face the day!”?
Rising Amounts Of MN Senior Citizens In Bankruptcy
Ok, I am digressing here just a bit. The discussion here is about our older Minnesotans and debt. I cringe when I see our older clients servicing debt and depriving themselves of necessary medication, food, and other hygiene products necessary to take care of themselves.
Obviously, to our older friends, they also care about quality of life and legacy. As to quality of life, a life filled with servicing credit card debt payments sucks. It robs these folks of the ability to purchase medicine, food, and hygiene products. Beyond that it robs them of the ability to enjoy retirement and the freedom to do what they want to do. I am not speaking about traveling extensively I am just speaking about the ability to travel at all.
For so many older Minnesotans we see, they struggle to keep current on their rent/mortgage payment and keep the lights on. How sad it is to see someone who has worked a life time to be so close to homelessness and still servicing credit card debt payments!
Bankruptcy Can Help MN Seniors Protect Assets
Legacy is also important to our friends. They don’t want to leave debt to their children. I have had many cases where my client really doesn’t care if the credit card company gets a judgment against them but they do care that it will be a judgment against the real estate that will be left to their children. So, we file the bankruptcy and then remove the judgment from the public record so that upon the death of the debtor, their children inherit the home without the burden of the judgment.
Much of the time, when we see older clients, they don’t always have a lot of assets and their income (social security) is normally protected. The question arises, why file bankruptcy if a creditor cannot take the money in the account anyway? Doing nothing is certainly always an option for debtors, but most elderly people do not find getting sued funny. They also don’t find phone calls and attempted bank levies much fun either. Even if the creditor cannot take the social security money, the creditor can still put a freeze on the elderly client’s bank account. When that happens, the elderly client not only has no access to her money but her checks are bouncing too.
No body wants to live like this. Unless a child or care giver can shield the debtor from his/her creditors by checking their mail and fielding phone calls and trying to deflect lawsuits, a bankruptcy may be the only viable answer. Sometimes it really is a quality of life question. Do you want mom or dad to live with this kind of financial stress in their golden years? We have met with many a reluctant elderly clients only to have them realize bankruptcy is the medicine they need to take to free themselves of their overwhelming debt problem.
One Thing A Debt Collector Won't Tell You
With this said, I have had some success with older clients and little assets just drafting a letter and giving the debtor several copies of it- and then tell the debtor to stick a copy of the letter in the bill and send it back to the creditor. The letter would say essentially he debtor is judgment proof and 80 years young with no assets- sorry they cannot pay but you are wasting your time- please kindly go away.
Much of the time, with older clients and no assets, the creditors will go away. But, if the older client owns a home or has anything in terms of assets this becomes much more problematic. Sometimes the creditor is so aggressive they don’t really care how old the debtor is and how little they have for assets. They aggressively pursue your client with vigor. The stress this can place your client under is enormous.
In situations such as this, your client should look into filing either a chapter 7 bankruptcy or a chapter 13 bankruptcy.
Chapter 7 Bankruptcy In Minnesota
Chapter 7 Bankruptcy in Minnesota, commonly referred as a “fresh start” bankruptcy is a four month process from start to finish. The focus in a chapter 7 is on the debtor’s assets. Most debtors that file for bankruptcy protection don’t lose any assets in bankruptcy. Most debtors get to keep their homes, furnishings, clothing, pensions, etc.
For most elderly clients me and my MN Bankruptcy Lawyers meet with, they have a home, furnishings, clothing, modest jewelry, and few misc hand tools and gardening equipment. If they own their home free and clear, they may have a modest amount of items we cannot protect. This usually amounts to maybe $1,000.00 to $2,000.00 in assets. If your client has $60,000.00 in debt and that debt will get discharged or wiped out, paying 1-2k to a chapter 7 trustee is not a bad deal!
In many situations, the client will lose no assets at all. The freedom they will get from shedding themselves of the stress of overwhelming debt cannot be calculated. The regret we hear most often is why didn’t we file the bankruptcy sooner.
We do get older clients who have wonderful pensions and income. We also see debtors who do have a lot of assets but also have a lot of debt. This may be an ideal situation for a chapter 13 bankruptcy.
Chapter 13 Bankruptcy In Minnesota
Debtors do not lose assets in a Chapter 13 Bankruptcy in Minnesota. That is one benefit of filing a chapter 13 bankruptcy. Of course, if the debtor has the ability to make a payment back to their creditors a chapter 13 bankruptcy is required anyway. What does the debtor gain by filing a chapter 13 bankruptcy you ask? In a word- control. Let’s use an example. Assume that Pete from Roseville, Minnesota has a mobile home in Florida worth 30k and let’s assume Pete owns a home free and clear in Roseville, Minnesota. If Pete is 77 years young and has 80k in credit card debt, Pete could make payments of $500.00 per month for a period of 60 months and whatever is not paid off gets wiped out, tax free forever!
No matter how you dice it, that is a good deal. Pete loses no assets, his creditors are barred from collecting from him while he is in the bankruptcy and the remaining unpaid debt gets wiped out tax free. So, Pete will wipe out approximately $50,000.00 in credit card debt. Not bad at all.
If Pete’s credit card payments were $1,900.00 a month, that saves Pete $1,400.00 to do what he wants with. It also makes Pete feel good because he is making a payment back to his creditors but it is based on what he can afford to pay.
The term “golden years” conjures up images of a state of nirvana for older people. Plenty of money, time, friends, health, traveling and good times right? It doesn’t always work out that way. I prefer to think of retirement as a state of mind not a state of material wealth or physical health.
Certainly, having overwhelming debt can hinder your state of mind and make routine living stressful. Bankruptcy will not always be the answer for older folks. In fact, I want to be very clear, if you can avoid a bankruptcy, of course you should. However, bankruptcy is a medicine that when taken can remove the burdens of our older generation by allowing them to live a life free from overwhelming debt.
Sometimes a letter mailed to each creditor is enough to scare off would be aggressive creditors from pursing an older person. When that works, fantastic- you get the benefit of avoiding a bankruptcy and the peace of mind that comes with not being pursued for money by eager collection companies looking to score more money to earn a bigger bonus.
When You Should Call The Kain & Scott Bankruptcy Lawyers MN
When in doubt, don’t be afraid to reach out to the experienced and kind Kain & Scott Bankruptcy Lawyers MN to help guide the way. Ultimately, your client’s happiness is the most important consideration to deal with. I am always amused by those among us with low anxiety- you know it can be raining turds, and they are still okay. I am higher anxiety and need to plan out the worst case scenarios. Sometimes, what your client needs to do is dependent upon their level of anxiety and nothing more. I know that is the case for me.
