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The New York Times reported on 08/05/2018 in a piece by Tara Siegel Bernard that, “The rate of people 65 and older filing for bankruptcy is three times what it was in 1991…” The New York Times article is largely based on a study by the Consumer Bankruptcy Project.

One example in the article sounds very similar to stories I have heard as a bankruptcy attorney in Janesville. “Cheryl Mcleod of Las Vegas filed for bankruptcy in January after struggling to keep up with her mortgage payments and other expenses. “I am 70, and I am working for less money than I ever did in my life,” she said. “This life stuff happens.” “Much like the broader population, people 65 and older usually cited multiple factors. About three in five said unmanageable medical expenses played a role. A little more than two-thirds cited a drop in income. Nearly three-quarters put some blame on hounding by debt collectors,” said the article.

If you find yourself in a similar situation bankruptcy may be able to provide you with the fresh start that you need. Many times older people can avoid bankruptcy for the simple fact that they are what is referred to as being “judgment proof.” They can be sued, but the creditor(s) can’t really do anything to enforce the judgment because Social Security cannot be garnished. If you would like to get further information about whether bankruptcy would be appropriate for you, we can talk to you on the phone, or for a more in depth conversation you can make an appointment for a free consultation with a bankruptcy attorney at our office.

Madison Attorney David Krekeler is known for putting on entertaining and informative seminars for bankruptcy attorneys. I have attended several of them, and one thing that he often emphasizes in these talks is the importance of disclosure. As David puts it, just as the three most important things in real estate are “location, location, location,” the three most important things in bankruptcy are “disclosure, disclosure, disclosure.” If someone gets into trouble in a bankruptcy case, it is often because of a failure to disclose something about their finances. An example of this was reported by the Peoria Journal Star on 11/27/2017.

A man from Brimfield, Illinois “was sentenced last week to home confinement and a $3,000 fine for concealing $100,000 worth of insurance policies when he filed for bankruptcy.” Initially, the man had reported no life insurance policies on his bankruptcy schedules. He then amended his schedules to reflect his ownership of one life insurance policy worth $3,000. It was later discovered that he in fact owned seven life insurance policies worth a total of $100,000. “He also admitted he hid three cashier’s checks worth $65,000 and a 2005 motorcycle.”

Obviously, this guy was pretty outrageous in his failure to disclose, but his story shows that it is important that a debtor take the completion of his or her bankruptcy forms seriously. However, this shouldn’t cause the debtor to lose sleep over whether their 10 year old couch is worth $200 or $250. You need to provide information to the best of your knowledge and ability. If you make an honest mistake and forget to provide some information in your forms, you are allowed to amend your forms accordingly.

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