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Home > Blog > Estate Planning > Your Estate Plan Should Be Realistic About Your Debts

Your Estate Plan Should Be Realistic About Your Debts


Many young and middle-aged people aspire to be debt-free someday, and they can find no shortage of online content offering motivation and advice, some of it more practical than the rest, about how to pay off one’s debts.  When you are in your 40s, enough of your future is so far away as to appear to your mind’s eye as a blank slate.  Therefore, you are free to daydream about what you will do when you are debt-free without having to fill in the details about how you will get there.  When you are retired, though, there are only so many sources from which you can derive income to pay off your debts.  The time to address them is now, and the relief, or perhaps even prosperity, that you can get for them can only go toward your already modest retirement.  There are no legal loopholes that will make you a multimillionaire if you retired at age 65 with no savings and are subsisting on Social Security income.  A Bronx estate planning lawyer can help you be realistic about the debts that have followed you into retirement.

You’re Never Too Old to Be in Debt

Your financial obligations do not automatically disappear when you retire.  Some of your expenses get lower; for example, Medicare covers many of your medical costs, and you no longer have to spend money on commuting to work and dry cleaning your work clothes every week.  Despite this, debts you incurred while you were working can still have unpaid balances when you retire.  These are some major sources of debt for people over the age of 60:

  • Parent PLUS loans that you borrowed to fund your children’s education
  • Student loan debt for graduate degrees you pursued in your 30s or later
  • Car loans with long repayment terms
  • Home equity lines of credit
  • Loans on which you co-signed with younger family members
  • Auto title loans

Debt Relief Options for Retirees

For adults of working age, filing for bankruptcy protection is often a practical and effective way to get debt relief; it discharges eligible debts such as old medical bills and credit card debts, thereby freeing up funds to use for repayment of obligations you cannot discharge, such as student loan debt or debts that a family court or criminal court has ordered you to pay.  Bankruptcy is usually not the best option for seniors, though, because your retirement accounts and Social Security income are safe for creditors even when you do not get the bankruptcy court involved, and because your home equity can count against you in your bankruptcy case.  It is better to try to settle with creditors out of court or warn the personal representative of your estate to expect creditor claims.

Schedule a Confidential Consultation With a Bronx Estate Planning Attorney

An estate planning lawyer can help you account for your debt-ridden reality in your estate plan.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.




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