By seeking this protection from creditors
, they can secure financial freedom to negotiate and make whatever financial obligations they have less onerous.
While many file for bankruptcy because they are suffering financial hardship, the method can be used to achieve other ends. Experts emphasize that seniors can harness this technique to help protect their nest egg, according to The New York Times.
Individuals who have saved up significant amounts for this key event need to know their rights. If people in this situation suffer a financial hardship, spending their retirement savings can be quite detrimental, retirement expert Deborah Thorne told The New York Times. When faced with these challenges, these individuals should take a different route.
"People usually postpone bankruptcy for several years before filing," Thorne, an associate professor of sociology at Ohio University, who has studied bankruptcy and seniors, told the media outlet. "When finances head south, they should file right away."
It is important to keep in mind that under federal law, both retirement savings and income are protected.
Individual retirement accounts are not vulnerable to creditors up to a certain amount, and this feature extends to 401(k)s. Amid the circumstances, Thorne said that individuals who have saved for retirement should do everything in their power to protect the fruits of their labor. In some cases, it may simply be a matter of know-how.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.