According to a recent article, consumer bankruptcies are on the rise for elderly Americans. The article states that those 65 and older are the fastest growing segment of those who are seeking bankruptcy protection with a median balance on their credit cards at about $22,500. This is a significant amount of debt, especially if you are not working and are only living on social security income. With that said the statute of limitations to collect on a debt in Washington state is 6 years. If your only source of income is from social security and you have no other assets of significant value, then you may be what is called “judgment proof.” Being judgment proof means that even if a creditor gets a judgment against you in court, they still can’t collect because essentially you don’t have anything they can collect from as creditors cannot touch social security income.
With that said if you are being hounded by debt collectors and don’t want to deal with them or letters from creditors, a chapter 7 bankruptcy may be a good way to go to clean the slate and eliminate your debts. The moment you file for chapter 7 bankruptcy, nobody will be able to collect on a debt due to the automatic stay being in place. One court appearance is required in chapter 7 bankruptcy in most cases and debtors will receive a discharge of their debts in about 90 days from the date of filing. Most bankruptcy cases will have no issues but your bankruptcy attorney will asses your situation prior to filing and inform you of any potential issues. If you receive other income aside from social security filing bankruptcy may make more sense as this income could be garnished by debt collectors.