In part 1 we learned how Steve and his wife had their peaceful retirement sidelined but Steve’s trip to the hospital and the insurmountable debt that followed. In part 2 we will see how filing for bankruptcy with our firm rescued them from their debt predicament.

After a consultation with our office, Steve and his wife learned all about how bankruptcy could help them completely eliminate their debt and get creditors off of their backs. But they also learned something completely unexpected.

Bulletproof (Wish I Was)

Essentially, Steve and his wife were almost judgment proof. Their only income was in the form of social security. Since creditors aren’t allowed to pursue social security income to satisfy a debt, their money was safe from creditors.

Creditors really had only one way to get at Steve financially. His only major asset was his home which he owned free and clear. It was a modest place only worth about $100,000, but it was something that his creditors could put a lien against. Fortunately for Steve, he was not planning on selling his home in the near future. This meant that any lien by a creditor wouldn’t really hurt Steve and his wife financially, because liens are worthless to a creditor unless the house is sold. Only then can they collect what they are owed.

However, Steve and his wife were still concerned about a possible lien on their home. They liked the idea that they could always sell their home and use the money to live off of if either or both of them would need the extra care that only a retirement home could provide. Also, if they passed their home down to their children, they want to be sure they would receive the home completely free from debt.

And there was one more issue to be concerned with – the creditor harassment. Even though they were nearly judgment proof, they were not harassment proof. As long as the debt remained, they would be subject to harassing phone calls and threatening letters. This impinged on the peaceful retirement they had looked forward to enjoying for so long.

Like a Bridge Over

Ultimately, they decided to file for bankruptcy. We quickly filed their case and eliminated all of their debts. They were left with the home that they owned outright, free from any threat of a lien, and they owned one car which they used only once or twice a week to go to the store on Mondays and church on Sundays.

If you visited Steve and his wife today, you would probably see them out by the pool.He might offer you a cheeseburger fresh from the grill, and would likely tell you the story of how bankruptcy helped him escape his debt and get back to enjoying his retirement once again.