The number of seniors who are filing bankruptcy in Maryland and across the country has been rising starkly in recent years. In most of the cases, the seniors filing for bankruptcy protection made less money than the population at large. Among senior households that filed for bankruptcy during the year 2016, 78% had less than the median annual income. In that year, bankruptcy filings by people 65 years old or older accounted for 12% of the total filings; that figure in 1991 was only 2%.
The protection of an automatic stay in Chapter 13 bankruptcy
Most people who file for bankruptcy do so because their financial circumstances leave them with very few alternative options. Some people have to file after their debt slowly increases month after month for a protracted amount of time.
Determining the right time to file for bankruptcy
In Maryland and across the United States, people experiencing heavy debt may want to file for Chapter 7 bankruptcy. Chapter 7 and Chapter 13 offer two types of bankruptcy for people facing serious financial challenges. A person who files Chapter 7 bankruptcy liquidates all unsecured debts, which means that the debtor no longer owes money to their creditors.
Student loan debt and bankruptcy
Student loan debt may be a major factor in some Maryland bankruptcy filings even though those obligations generally cannot be discharged. A study by the company LendEDU found that almost one-third of people who filed for Chapter 7 bankruptcy had outstanding student loans. Almost half of the total debt of that group on average was student loans. This means that even after these consumers file for bankruptcy, they still must pay off a substantial part of their debt load.
