As you get older, you may want to start planning for your retirement. Looking at your finances, you may find that you cannot retire easily with the amount of debt you currently have. In that position, you have a few options, such as paying down what you owe, negotiating with creditors or settling your debts.
Depending on the income you currently have, you may not be in a position to pay off your debt completed before you retire. Then, with your Social Security and any pension you may have, you may find that you can’t keep paying for things the way you used to.
What can you do? It’s time to plan for debt reduction and elimination
Though you are older, now may be a good time to think about bankruptcy. There are two main forms to consider, Chapter 7 and 13. Chapter 13 puts you on a repayment plan that lasts between three and five years, so if you still have several years before retirement, then this could be an option for helping you pay off what you owe before you retire.
Chapter 7 allows you to eliminate debts through liquidation, which is helpful if you cannot afford to make payments. Whether you pursue Chapter 7 or 13 bankruptcy may depend on the specific income you’re working with now, your debt-to-income ratio and other factors.
During bankruptcy, you can do a few things that will help your retirement feel more secure. You’ll:
- Have the potential to consolidate, reduce and pay down debt
- Be able to liquidate some assets, or potentially none, and then discharge your debts
- Be able to clear your debts within five years (at the maximum) with Chapter 13 bankruptcy or within a few months with Chapter 7
If you want to eliminate your debts, then this could be an excellent option.
Bankruptcy is not your only choice, but it is one to consider
Bankruptcy’s not your only choice if you’re struggling with debt and looking to retire, but it is often the fastest way to reduce or eliminate what you owe and to get back into control of your finances before you enter retirement.