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Senators Propose Boosting Seniors' Social Security Benefits

Millions of seniors nationwide are among those who rely on the financial support they receive each month via their Social Security benefits checks.

However, many say that these payouts have failed to keep up with inflation and the escalating prices of basic goods and services over time. One analysis showed that retirees have in fact lost significant buying power in the past two decades, all while they tend to face steep increases in health care costs as they age. As of 2023, Social Security benefits experienced one of the biggest losses of purchasing power – 36 percent – since 2000.

A newly introduced bill seeks to remedy this.

The Cost-of-Living Adjustment (COLA)

At the end of each year, the Social Security Administration (SSA) informs Social Security recipients about how much they can expect to see in their payouts for the forthcoming year. Benefits typically undergo some level of change based on the SSA’s annual cost-of-living adjustment (COLA). In 2024, COLA rose slightly, by 3.2 percent. For the average retiree, that equates to receiving about $59 more per month compared with 2023.

The year prior to that, COLA had increased by 8.7 percent. Current predictions for 2025’s COLA are coming in at about 2 percent.

Today, COLA calculations are based on a metric known as the Consumer Price Index for Urban Wage Earners (CPI-W). This is where the recently proposed legislation focuses on making a change.

Boosting Benefits and COLAs for Seniors Act

In late March 2024, U.S. Sen. Bob Casey (D-PA) introduced the Boosting Benefits and COLAs for Seniors Act. Four Democratic senators are serving as co-sponsors: Richard Blumenthal of Connecticut, John Fetterman of Pennsylvania, Kirsten Gillibrand of New York, and Vermont’s Bernie Sanders, plus Peter Welch, an independent from Vermont.

The Act centers on changing the formula that the SSA uses to calculate Social Security benefits for older adults. It proposes using a different metric, the Consumer Price Index for the Elderly (CPI-E). Incorporating the CPI-E into the equation would, according to advocates, better reflect the specific types of costs facing subgroups like seniors.

As co-sponsor Sen. Gillibrand puts it, the bill would “factor the high cost of health care into Social Security benefits calculations.” In turn, this would mean bigger payouts for seniors and, she adds, would “help make sure recipients aren’t forced to choose between paying for their medication and buying other necessities.”

Nearly a dozen different agencies, including Arc of the United States, the Alliance for Retired Americans, and Justice in Aging, have endorsed the bill.

Is an Independent Living Facility Right for Me?

Housing options and the associated costs are among the top priorities for many seniors. Today, the housing market is unpredictable, while many seniors currently living independently may also have concerns about continuing their lifestyles. Moving to an independent living facility may be the best choice to accomplish your financial goals and maintain your way of life.

What Is an Independent Living Facility?

An independent living facility is a housing arrangement that caters to older people, usually aged 55 and older. These facilities offer a community. Residents can live with people who share common interests while having fun and staying active. Some people may refer to these facilities as 55-and-over communities, active adult communities, or retirement communities.

These environments are different from other long-term care facilities. For example, in nursing homes patients are not likely to live in a private apartment or arrangement. They are usually dependent on medical caregivers. Residents of assisted living facilities, meanwhile, may not require medical care 24-7, but do need assistance with activities of daily living.

In contrast, older adults who live in independent living facilities continue to maintain their independent lifestyles but gain the support of trained staff.

Who Is the Best Fit for Independent Living?

Independent living facilities best serve seniors who do not require constant medical care. If you or your spouse require round-the-clock medical attention, you should consider another living arrangement. However, there are usually 24-hour staff in these types of facilities to respond in case of an emergency.

While independent living facilities are best for more active seniors, they are also beneficial for older adults who do not have the ability or resources to maintain their homes anymore. Independent living facilities remove the need for older people to do household chores and yardwork, which can make their lives that much easier.

Types of Independent Living Facilities

Living arrangements in these facilities can vary. Here are some of the types of housing options an older adult can expect from an independent living facility:

Senior Apartments

A senior can choose to live in an apartment complex that is age-restricted, where most residents are at least 55 years old. Some facilities include recreational programs, community meals, transportation services, and community services in the rent.

Low-Income Housing

If you are a low-income senior, you may be able to find housing complexes that are subsidized by the United States Department of Housing and Urban Development (HUD). Learn more about HUD’s Supportive Housing Program.

Continuing Care Retirement Communities

At a Continuing Care Retirement Community (CCRC), seniors who can care for themselves but have declining health may be a good fit. CCRCs allow a spectrum of arrangements, so when a resident’s health starts to wane, they can easily move from one part of the facility to another that offers more extensive care while remaining in the same complex.

What Should I Look for in an Independent Living Facility?

You should take some time to consider what you want in your living arrangements before making a final decision about where you will spend your time in your older years.

You may want to consider location as a major factor in your decision. Will you be close enough to stay in contact with your network of family and friends, if that is your preference? Or would you like to make a move to a different state or a warmer climate to connect with new people?

What services are you set on having? For example, will you have your own vehicle and, if not, does the facility offer transportation options?

You may want to live in a facility that offers certain amenities. Perhaps you would like to use a gym, take part in classes or workshops, or enjoy other hobbies. Some facilities offer access to more than one on-site dining option. Others may have a movie theater, nail salon, walking trails, or organized trips to nearby museums, concert halls, or casinos.

Of course, cost is more often than not also part of the equation. Compare the costs of several different independent living communities if possible. Confirm whether the cost of the facility includes the services and amenities in which you are interested.

Pricing will also vary greatly across states and cities. For instance, in Connecticut, the average monthly cost for an independent living facility is nearly $3,500. In Mississippi, the average may be less than $2,000 a month.

Also, think about the following before choosing a community:

Your Health and Your Spouse’s Health

The level of care you and your spouse require is one of the biggest questions that you must answer before choosing the best living arrangements. Independent living facilities are not the best option for people who need a great deal of medical care.

Your Mobility

It may be time to make new living arrangements if your mobility has decreased as you have gotten older.

Can You Maintain Your Home?

Moving to an independent living facility can be a good decision for seniors who are looking to downsize from their home.

2023 AARP Report Recommends Supports for Family Caregivers

Many older Americans choose to have their family members care for them as they age. Despite the comfort a familiar face may provide, there is a significant cost for the loved ones who sacrifice their time, and often their upward economic mobility, to ensure that they can secure proper care for their senior parent.

In a report issued in March 2023, AARP stresses the importance of supporting family caregivers in their financial, emotional, physical, and professional lives. The analysis gives a glimpse into the experiences of family caregivers and also offers recommendations on policies, practices, and programs – across public as well as private realms – that policymakers should consider enacting or enhancing in support of caregivers and the individuals who are in their care.

How Much Does It Cost to Be a Family Caregiver?

Being a family caregiver can come at a great financial cost. The average cost of caregiving has risen exponentially in the past several years, and the trend is expected to increase more over time.

In its report, AARP estimates the value of family caregiving in 2021 at $600 billion dollars in unpaid contributions – up from $470 billion dollars in 2017.

The monetary value of caregiving is not the only cost of care. For family caregivers, some of the intangible costs of included:

• spending an average of 18 hours per week to tend to the needs of their loved ones
• facing higher risks of chronic loneliness, which may have negative health effects
• neglecting their own self-care

What Are the Major Issues in Family Caregiving?

According to the AARP report, by 2034, the population of people over 65 will outnumber the population of children under 18. With this historic shift, the researchers suggest that the impact on family caregiving will become even more prominent in several key areas:

The Need for Tailored Support for Diverse Caregivers and Their Families

Family caregivers across diverse cultures, ethnicities, sexual orientations, and gender identities often face concerns about access to support that is specific to their community. Ensuring that affordable, inclusive, readily available policies and services are in place to meet these needs of these caregivers will continue to be critical.

Direct Care Workforce Shortage

Amid a shortage of professional caregivers that only worsened during the COVID-19 pandemic, AARP notes that the turnover rate among the direct care workforce averages between 40 percent and 60 percent each year. Failing to recruit and retain a dedicated workforce in caregiving as the aging population grows will inevitably add to the burden carried by unpaid family caregivers.

Economic Impact on Working Caregivers

Most family caregivers – nearly two-thirds of them in 2019, according to AARP – hold a full- or part-time job in addition to caring for their loved ones. These workers often take an economic hit because they need to split their time between their jobs and their home responsibilities.

Without such supports as telecommuting, paid leave, and respite care, they may have no choice but to call out of work, turn down promotions, or even leave their job altogether to dedicate themselves fully to providing care. This can then mean additional financial stress as well as adverse effects on their career and future earning potential.

A Growing Sandwich Generation

In 2019, about 30 percent of older Americans were living with their children or grandchildren. The so-called “sandwich” generation represents those who are responsible for caring for their children and their aging parents at the same time, while also working. These caregivers, who are likely to report more emotional and financial pressure, now tend to include workers across an ever-expanding age span – from 35 to 64.

Recommendations

The AARP’s report recommends specific policies and practices to support family caregivers going forward. These recommendations to policymakers include the following:

• Including family caregivers in planning and decision making across health care settings
• Improving access to respite care for family caregivers
• Ensuring that publicly funded programs and supports for caregivers are inclusive, culturally appropriate, and designed to meet the needs of diverse populations
• Offering family caregivers a tax credit
• Expanding protections for workers who rely on the Family and Medical Leave Act and related state programs while providing long-term care for family members, including instituting paid leave for working family caregivers
• Allowing for other programs that pay family caregivers
• Improving Social Security benefits for people who provide long-term care services to family members

Additional Resources

Having a care plan in place for your loved ones in advance may help decrease the financial costs and other stresses associated with paying for long-term care for aging adults. Your elder law attorney can help you create a comprehensive long-term care plan that will address the costs associated with tending to the people you love. 

What Is Respite Care? Can It Help With Caregiver Burnout?

It is easy to burn out when you are responsible for providing full-time care to an aging or disabled loved one. In some cases, caregiver burnout can result in resentment toward the individual they care for, despite their love for them.

The fact is, we all need a break sometimes. That is why respite care exists. If you are a caregiver who needs to take time for yourself, read more to learn about respite care.

What Does Respite Mean?

Taking respite means having a temporary period of rest. For primary caregivers, this typically refers to securing short-term care for your loved one – even several weeks or months – so that you can recharge amid the very real burdens of caregiving.

In finding respite, you also might make time to practice self-care, from going to the gym to connecting with friends. Do not forget to find ways to maintain your sense of self while you are in the midst of giving so much of your time and attention to someone else.

Caregivers Want Information About Respite Care

In a 2022 survey of caregivers, Caregiving in America found that most were unaware that respite care was available. Many caregivers need more education about their options for respite care and how to build a network of support to share the load of providing financial and emotional support to an ailing loved one.

Here are some of the study’s findings:

• Fifty-nine percent of respondents reported that they were the primary emotional support system for a sick or impaired loved one.
• Twenty-two percent of respondents said they worked more than 40 hours per week as the primary caregiver to a disabled family member.
• Forty-eight percent of respondents disclosed they needed emotional support for themselves.
• Forty-four percent of respondents shared that they wanted information about where to find respite care.

Caregivers need information about maintaining their own health while supporting a family member. It is essential to prioritize yourself when caring for an aging or disabled relative.

Preventing Caregiver Fatigue

The challenges of taking care of an ailing loved one can be extremely stressful. More than that, the strain of serving as a caregiver – often unpaid – can make a real and lasting impact on your own health if not kept in check.

Symptoms of burnout among caregivers may include the following:

• Losing sleep and extreme fatigue
• Feeling hopeless
• Having a quick temper
• Lack of interest in your favorite activities

If you or someone you know has taken on the responsibilities of caregiving, be aware of the signs of burnout and actively seek support. Respite care is among your potential options.

What Is Respite Care?

Respite care gives caretakers a chance to relax and take a break from the responsibility of providing full-time care to loved ones who are aging or disabled. Respite programs offer short-term replacement care. These providers will step in for a short period to take on the responsibility of caring for your loved one.

The types of care you can expect them to take on may include the following:

• Bathing and dressing
• Cooking and cleaning
• Helping your loved one eat, drink, and take their medication
• Getting into and out of bed
• Assistance with the restroom
• Spending quality time with your loved one
• Helping with exercise and personal care

How Much Does Respite Care Services Cost?

The cost of respite care varies depending on how long you use the service. You can schedule respite care for several days, weeks, months, or longer.

Who Pays for Respite Care?

Private insurance will typically not cover respite care, unfortunately. If your loved one is covered by Medicare or Medicaid, you may be able to secure five consecutive days of respite care. Your loved one must be receiving hospice care benefits for Medicare to cover respite care.

Finding Respite Care

Several organizations provide respite care. If your family member is covered by Medicaid, you can speak to a Medicaid planner in your state to determine what programs may be available. As mentioned above, Medicare covers respite care under its hospice benefit.

If your loved one is not covered by Medicare or Medicaid, don’t worry; there are private organizations that provide this service. These organizations include:

• National Adult Day Services Association (NADSA)
• Your Area Agency on Aging (AAA)

In addition, connect with your attorney to talk through your options.

Becoming a Family Caregiver for an Ailing Loved One

Taking on the responsibility of providing full-time care for an aging or disabled loved one can be a rewarding experience. Being a primary caregiver helps you rest assured that your loved one is receiving compassionate care from someone who will go above and beyond to ensure they are comfortable and looked after.

Despite your good intentions to create a comfortable environment for your loved one, full-time caregiving is a significant time commitment. There is also a financial reality that the caregiver must face. Fortunately, family members who want to serve as caregivers may have options to help cover the expense.

What Is a Caregiver, and What Do They Do?

Professional caregivers work intimately with seniors to meet their needs as they age. As individuals get older, their needs change and they may need more help going about their day.

Examples of the kinds of help caregivers provide include:

• Bathing and grooming
• Help with toileting
• Medical appointments and medication compliance
• Transportation
• Companionship
• Cooking, cleaning, and grocery shopping
• Care for animals
• Laundry
• Coordinate benefit care/speak to insurance companies on the senior’s behalf, if authorized

Family Caregivers: Know the Downsides

Having a family member serve in the role of caregiver can make for a better experience for your loved one and, in some ways, give you peace of mind as well. However, there are some downsides to be aware of if you are considering becoming a family caregiver.

Your own health, both physical and emotional, can be negatively affected when taking on the burden of caring for a family member. Be sure to engage in self-care, maintain a healthy diet, and watch out for signs of stress and burnout. When you do need a break, consider looking into respite care.

If your loved one has specific medical issues that will require the attention and expertise of a professional health care provider, you may want to reassess whether you should take on the role of family caregiver.

Taking care of a loved one who is getting older or who is disabled will likely require a great deal of your time, too. You may find yourself not performing as well at work or having a longer commute as you fulfill the needs of your ailing loved one. Not to mention that your own immediate family may be missing out on valuable time with you while you are caregiving elsewhere.

In turn, this could mean you will have less time to hold down a full-time job. In fact, a 2020 AARP survey showed that about 20 percent of family caregivers reported experiencing a high level of financial stress. Nearly 30 percent of them stopped saving altogether as a result of providing care for their loved one.

In these challenging economic times, you must be able to support yourself while ensuring the best care for your aging family member.

Can Family Members Get Paid for Their Work as a Caregiver?

Fortunately, certain programs are available to help family members care for ailing relatives. You may need to do a bit of research to find the right option for your circumstances.

• Medicaid Self-Directed Care

For individuals on Medicaid, the Medicaid Self-Directed Care Program is one option that gives them the authority to manage their services. In certain states, this program offers recipients the ability to use the resources allocated for home care to pay a family member to help them with their daily needs. The Medicaid Self-Directed Care Program lets seniors have more autonomy over their care.

Note that such programs vary by state, however, and not all states will have an option like this. Each state may also use different criteria to define who qualifies as a “family” caregiver. Find your local Area Agency on Aging to learn more about the possibilities, or call your local Medicaid agency.

Note that, generally, Medicare will not cover the costs of caregiving by a family member.

• Veteran’s Benefits

If your loved one is a military veteran, there are special benefits available to cover their home care, including the Veteran’s Directed Home and Community Based Services program. This program gives veterans a flexible spending budget that the veteran can use to pay a family member to act as their caregiver.

• National Family Caregiver Support Program

Note that this program does not pay caregivers directly. Rather, it helps fund several different types of services for family caregivers, from training in caregiving to respite care. Learn more about this program.

• Long-Term Care Insurance

If you are thinking ahead to who will care for you as you age, you may consider long-term care insurance when creating an estate plan. Certain long-term care insurance policies allow the policyholder to pay family members to work as caregivers. However, that is not true for every policy. Some policies do not allow policyholders to pay family members to work as caregivers if they live in the policyholder’s home.

Before taking out this type of insurance policy, you should speak to your attorney to ensure you are properly advised.

How Much Long-Term Care Insurance Should You Purchase?

Long-term care insurance helps you prepare for financial costs associated with aging, such as nursing home care, assisted living, or in-home care. Yet long-term care insurance policies vary widely in terms of the amount of coverage and how long the protection lasts.

The Average Costs of Care

The 2021 Genworth cost of long-term care survey provides national median monthly costs for the following:

• Nursing home care = $9,034 (private room); $7,908 (semi-private room)
• Adult day health care = $1,690
• Assisted living = $4,500
• Homemaker services = $4,957
• Home health assistance = $5,148

Whether you have a health condition that you know will require care in a skilled nursing facility or prefer to prepare for unexpected medical events, you may consider purchasing a certain amount of long-term care insurance to account for future care.

Evaluate which services you expect to need. Although many individuals need nursing home care, others can avoid nursing home costs by combining assisted living services with in-home care or day health services.

How to Calculate Your Monthly Benefit

Most policies provide between $2,000 and $10,000 of funds per month. To estimate how much long-term care insurance you will need:

1. Review how much you can expect to spend on long-term care.

2. Subtract the cost of services from the amount of money you can budget toward your long-term care expenses; the remainder is the amount you need long-term care insurance to cover.

Suppose you have a monthly income of $2,500 and plan to move into an assisted living facility that costs $4,500 per month. In that case, you will need a minimum of $2,000 per month in long-term care insurance to cover the cost of assisted living.

In addition to determining how much coverage you need each month, think about how long you want your plan to last. Long-term care insurance that lasts longer can be relatively more expensive, yet it provides increased protection.

The Department of Health and Human Services states that most people need long-term care by age 65. The majority of people need care for two years, but 20 percent require care for longer than five years. Most people should obtain at least two years of coverage and contemplate purchasing additional coverage.

Medicaid Planning

As you plan for your future, consider purchasing long-term care insurance that protects you for five years if you intend to apply for Medicaid. Since the Medicaid lookback period is five years, you may transfer your assets to your family and begin to spend down your assets so that you can qualify for Medicaid after your five-year coverage ends. After five years on private insurance, you may be able to transition to Medicaid.

The amount of long-term care insurance you buy should fit your unique circumstances. 

Speak with your attorney to learn more about preparing for your future with long-term care insurance.

Requiring Adult Children to Pay for Aging Parents' Care

Did you know you could be responsible for your parents' unpaid bills? More than half of all states currently have laws making adult children financially responsible for their parents, including their long-term care costs. However, these laws are rarely enforced.

Filial responsibility laws obligate adult children to provide necessities like food, clothing, housing, and medical attention for their parents who cannot afford to take care of themselves. States may allow a civil court action to obtain financial support or cost recovery, impose criminal penalties on children who do not support their parents, or allow both civil and criminal actions. 

Generally, most states with such laws do not require children to provide care if they lack the ability to pay. States also vary on what factors they consider when determining whether an adult child is able to pay. Children may not be required to support their parents if the parents abandoned them or did not support them.

With regard to long-term care, most low-income parents qualify for Medicaid, making it unnecessary for a nursing home to pursue the resident's children for payment. When the Deficit Reduction Act of 2005 made it more difficult to qualify for Medicaid, experts predicted a wave of lawsuits by nursing homes under state filial responsibility statutes, but that has not happened. However, in 2012 a court in Pennsylvania ruled that a son was responsible for his mother’s $93,000 nursing home bill under the state’s filial responsibility law. 

While in most instances adult children are not held responsible for their parents’ long-term care bills under these laws, they may have to pay a nursing home in other circumstances. In some cases, children have been held liable if their parent transferred assets to them, making the parent ineligible for Medicaid. Additionally, there are cases in which children who signed an agreement affirming that they would assist their parent in paying for a nursing home have been sued for breach of contract by the nursing home. After a parent dies, Medicaid estate recovery allows the state to recoup Medicaid benefits from the parent’s estate, reducing the amount the children can inherit. 

If your parent needs long-term care, be sure to consult with your attorney to make certain you are not creating a situation in which you might be liable for your parent’s care. 

Should You Prepare a Medicaid Application Yourself?

Navigating the Medicaid application process can be complicated, especially if you are applying for long-term care benefits. Hiring an attorney to help you through the process can be extremely helpful. 

Whether you should prepare and file a Medicaid application by yourself or should hire help depends on answers to the following questions:

• How old is the applicant?
• How complicated is the applicant's financial situation?
• Is the individual applying for community or nursing home benefits?
• How much time do you have available?
• How organized are you?

Medicaid is the health care program for individuals who do not have another form of insurance or whose insurance does not cover what they need, such as long-term care. Many people rely on Medicaid for assistance in paying for care at home or in nursing homes.

For people under age 65 and not in need of long-term care, eligibility is based largely on income and the application process is not very complicated. Most people can apply on their own without assistance.  

Matters get a bit more complicated for applicants age 65 and above and especially for those of any age who need nursing home or other long-term care coverage. In these cases, availing yourself of the services of an attorney is practically essential.

Medicaid applicants over age 65 are limited to $2,000 in countable assets (in most states). It's possible to transfer assets over this amount in order to become eligible, but seniors need to be careful in doing so because they may need the funds in the future and if they move to a nursing home, the transfer could make them ineligible for benefits for five years. Professional advice is also crucial because there is a confusing array of different Medicaid programs that may be of assistance in providing home care, each with its own rules.

All of that said, the application process itself is not as complicated for community benefits (care that takes place outside of an institutional setting, such as in the beneficiary’s home). In short, those over 65 may need to consult with an elder law attorney for planning purposes, but they or their families may be able to prepare and submit the Medicaid application themselves.

But submitting an application for nursing home benefits without an attorney's help is not a good idea. This is because Medicaid officials subject such applications to enhanced scrutiny, requiring up to five years of financial records and documentation of every fact. Any unexplained expense may be treated as a disqualifying transfer of assets, and many planning steps -- such as trusts, transfers to family members, and family care agreements -- are viewed as suspect unless properly explained. Finally, the process generally takes several months as Medicaid keeps asking questions and demanding further documentation for the answers provided.

Many elder law attorneys offer assistance with Medicaid applications as part of their services. This has several advantages, including expert advice on how best to qualify for benefits as early as possible, experience in dealing with the more difficult eligibility questions that often arise, and a high level of service through a long, grueling process. The one drawback of using an attorney rather than a lay service is that the fee is typically substantially higher. However, given the high cost of nursing homes, if the law firm's assistance can accelerate eligibility by even one month that will generally cover the fee. In addition, the payments to the attorney are generally with funds that would otherwise be paid to the nursing home -- in other words, the funds will have to be spent in any event, whether for nursing home or for legal fees.

Is Bankruptcy Considered Financial Hardship?

There is no doubt that bankruptcy can be difficult for people. No one wants to declare being bankrupt unless and until they have no way out of the debts. So, if you are asking whether or not bankruptcy is considered as a financial hardship, then the answer is - definitely, YES! A bankruptcy can cause a very lasting impact on the creditworthiness and life as well, to ensure that you are rectifying the situation and getting back to normal, you have to restructure your debts and cut back on the costs. To do that you will need the best bankruptcy attorneys by your side.

We, at Fong Law Group, can ensure that you are getting the best legal help to go through the bankruptcy procedure and all the legal proceedings and meetings efficiently. We offer the best legal services related to bankruptcy in Monterey Park, California and in the surrounding areas.

What is financial hardship?

Financial hardship means when you find it difficult to repay your debts and loans. When you are in extreme financial hardship that you couldn't pay off your bills and debts or the loans, you apply for bankruptcy. Financial hardships can be considered when you are:

• Unable to pay of your bills
• Unable to repay the debts that you have
• Unable to pay off your loans to the creditors

Hence, a bankruptcy is considered a financial hardship. Declaring bankruptcy is considered as the last resort to get out of the financial hardships that you are facing. Many are relieved when they finally take the leap, and decide to file bankruptcy. It means the creditors stop calling, you can finally answer your phone again. It means a new start, and less stress worrying how you will be able to pay all your bills. But the main question is when can you file the bankruptcy?

 

When to declare bankruptcy?

Now that you know what financial hardship is, it is time for you to know when you can declare bankruptcy to start afresh. There are times when you can hit the rock bottom. Your liabilities i.e. the debts and loans can exceed your assets or income. This can be the worst thing and you need to get out of this situation immediately. The best way to get out of this situation is by filing bankruptcy.There can be different reasons to file bankruptcy. If your creditors are filing lawsuit against you or you are not able to pay off the debts properly, consulting with a bankruptcy lawyer is the best way to get out of this. Understanding bankruptcy and when to file it or how to file it can be quite difficult at times.

Moreover bankruptcy and financial hardship has a direct connection that an experienced lawyer can help you to know in a better way. So, look for the best lawyers or attorney in your area. Fong Law Group is here to help you in such situations when you are confused about bankruptcy. What to do? When to file bankruptcy? How to file bankruptcy? You can get all the answers straight away from the best lawyers of Monterey Park California

Call Fong Law Group at (626) 289-8299 for a FREE consultation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

Is Debt Relief Better Than Bankruptcy?

One of the most common dilemmas that people often face is - debt relief vs. bankruptcy. Which one is better to choose? Both of these methods help you to come out of your outstanding debts that you are unable to pay off. When it comes to choosing one of these two methods, you need to consider a lot of different aspects related to your financial situations, debts remaining and more. A professional law firm or an experienced attorney can help you to choose the right method.

We, at Fong Law Group, can help you with your concerns related to debt relief and bankruptcy. We are located in Monterey Park, California and its surrounding areas. To learn more about bankruptcy vs. debt relief and how we can we help you, read on.

Debt Relief vs. Bankruptcy

Debt relief or debt settlement is about negotiation of the debt. In this case, you have to go through a debt management program where you will have a representative. You as well as your representative will attempt to make your creditors accept a certain portion of the total outstanding debt as the full payment. This is a kind of settlement which is done when you are unable to pay off your debts due to financial crisis.

On the other hand, there are mainly two different types of bankruptcies - a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. The Chapter 7 bankruptcy is also called straight bankruptcy where you have to file for a complete bankruptcy petition showing your loan documents, bank statements and credit card statements. The Chapter 13 bankruptcy is more like a wage earner's plan to manage your debt. In this case, you have to pay a certain amount of money to the trustee on monthly basis which will be distributed to the creditors based on priorities.

 

Which one is better?

When it comes to bankruptcy vs. debt relief, both have the same goal, to relief the person from their mounding debt. When you are facing financial crisis and unable to pay off your debts, choosing the right one is important according to your needs. Both of them have certain advantages as well as disadvantages.

Pros of debt settlement

• You get to settle the debt with a certain amount of money as full payment
• There will be no add-on fee after the debt is settled
• State will regulate the entire process of debt settlement
• You can avoid public records of being into bankruptcy

Pros of filing bankruptcy

• You will get a clean pass to make a fresh start with a Chapter 7 bankruptcy
• You will have to pay a small amount of money per month to the creditors with Chapter 13 bankruptcy, but is ideal if you own and want to keep your house, or are still paying on a vehicle
• This can prevent your utilities from getting shut off due to nonpayment
• Chapter 13 Bankruptcy helps you in renegotiating your secured debts like car loans, house loans, etc.

Want to get the best advice about which one to choose between debt relief and bankruptcy? You need the best law firm in Monterey Park California, Fong Law Group.

Call Fong Law Group at (626) 289-8299 for a FREE consultation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.