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Bankruptcy May Help Indebted Workers Save for Retirement

Could the days be over when reaching retirement age means actually being able to retire? A new survey seems to indicate so.

Almost one third, or 31 percent, of adults in the U.S. say they have no savings or pensions as they approach retirement. As if that isn’t worrisome enough, nearly 20 percent of those between the ages of 55 and 64 – right on the brink of retirement - have zero savings.

Over half of the respondents said they would have to continue working part-time or full-time well into their golden years. Others aren’t sure when or how they’ll leave the workforce.

In the vast majority of cases, the problem is debt. These days, many of us are living paycheck to paycheck and we’re relying on credit cards to bridge the gap. With credit cards, mortgages, school loans, medical bills and other obligations to pay each month, it’s all too easy to put off contributing to savings, including retirement funds. Making matters worse, most part-time workers and an increasing number of full-time employees don’t get retirement benefits from their jobs.

It’s not just nest eggs that are getting neglected: Fewer families than ever have emergency savings funds. Without a cash cushion to fall back on, all it takes is one unexpected expense - from a pay cut or job loss to an expensive home repair – to sink a household even deeper into debt and further away from the possibility of retirement.

Without savings, retirement is out of reach. But when you’re drowning in debt, how can you save? Budgeting can help, but only so much. When debt is keeping you from reaching your financial goals – not to mention your life goals – you need a more powerful solution. For a growing number of people, that solution is bankruptcy.

Contrary to the old myth that bankruptcy forever ruins credit, filing for bankruptcy can actually put you on the path to rebuilding credit – and, along with it, your financial future – by eliminating debt and freeing up money that would have gone to interest, late payments and other expenses.

For debtors with steady income, Chapter 13 bankruptcy makes it possible to repay debts in affordable installments – while also stopping foreclosure and protecting assets. Those with limited earnings who are able to qualify for Chapter 7 bankruptcy can often discharge unsecured debts in entirety.

It’s never too late for a fresh start. When you’re overwhelmed by debt, bankruptcy can give you the breathing room you need to take back control of your finances - and begin saving for your future.

Wondering if bankruptcy is right for your financial situation? Our bankruptcy attorneys can help you understand your options for debt relief. Call DebtStoppers or visit us online today to schedule your free no-obligation personal debt evaluation with one of our knowledgeable bankruptcy lawyers.

Resources:

31% of Americans have no retirement savings at all, by Melanie Hicken, CNN Money

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