L.A. Bankruptcy in Retirement: Talking With Your Parents
Talking money with parents who are aging is rarely a comfortable – or even welcome – discussion.
Sometimes‚ though‚ it’s a necessary one.
Our Los Angeles bankruptcy lawyers know that not only are they more likely to fall victim to scams‚ they are coping with a dwindling income‚ spiking medical bills and age-related memory problems – all of which may make them more vulnerable to a potential debt problem.
While bankruptcy is often considered as a last resort‚ particularly for someone in retirement‚ it can sometimes be the best solution. Older folks have increased costs for taxes‚ medical expenses‚ groceries‚ gas and more. Their income has taken a dive. Social Security’s incremental cost-of-living adjustment isn’t enough to keep pace with rates of inflation. Medicare doesn’t cover everything‚ and out-of-pocket expenses can quickly pile up.
Although many people – and older adults in particular – view bankruptcy as a kind of a failure‚ the reality is there are benefits to this route‚ especially for someone in retirement.
First‚ it’s not as awful as one might expect. It alleviates the worry. It can be a huge relief. Every dollar you aren’t shelling over to your creditors is another that can be used to cover your everyday expenses.
Many states have homestead exemption laws‚ so your home equity is often protected in these proceedings‚ as are your retirement and Social Security funds‚ up to $1.1 million.
And while you may not want to slip this into the conversation at the very outset‚ it’s important for you to know that nursing homes and assisted living facilities are barred from using a bankruptcy against you as a means to reject an application. It’s considered a form of discrimination.
But all of this is a discussion that you’ll need to approach gingerly with your parents. A study last year by Fidelity found that while a quarter of adult children believe their parents need assistance in managing their money‚ an overwhelming 97 percent of our older parents don’t feel the same.
At the end of the day‚ it’s a discussion about control. Even though you have the best of intentions‚ your parents are not eager to concede any portion of their independence – and that is something to which you must be sensitive.
As you consider your approach‚ understand that first of all‚ you’ll need to drop any air of condescension. Your tone of concern will be lost if all they hear is that you are questioning their intellect. In that same vein‚ try to avoid saying the words‚ “You should.” Nothing will put them more on the defensive than demanding action.
You might consider bringing in a neutral third party to help make the case‚ either for financial help or a bankruptcy filing. No matter how old you are‚ to your parents‚ you will always be their child. If you have someone like an experienced bankruptcy lawyer there to help you have this discussion will not only give legitimacy to your words‚ it may offer opportunity to have questions answered that you may not have previously considered.
Call us today to learn more about how we might be able to help.
If you are contemplating bankruptcy in San Fernando Valley‚ contact Nader‚ Naraghi & Woodcock‚ APLC to schedule your free consultation. Call (800) 568-0707.
How to talk to your aging parents about money‚ March 28‚ 2013‚ By Ismat Sarah Mangla‚ CNNMoney