What to do when caregiving leads to significant debt
Many adult children in Michigan act as caregivers to their elderly parents. And while this act of altruism is a good thing, it can lead to many expenses, debt and in some cases ultimately bankruptcy.
Expenses involved with caregiving
There are many expenses involved with caregiving. For example, an adult child may have to quit their job to focus on their parent’s needs. There are medical expenses to contend with, and the parent may still owe on their mortgage and the bills that come along with home ownership. In addition, an adult child may have to obtain in-home health care for certain needs their parent may have that they cannot handle on their own. All of these expenses can combine to cause the adult child to incur a significant amount of debt.
Bankruptcy may be an option
Adult children who serve as their parent’s caregiver and incur unmanageable debt in the process may be able to file for bankruptcy. In a Chapter 7 bankruptcy, known as “liquidation bankruptcy,” the debtor’s assets with some exemptions will be sold, and the proceeds used to pay the debtor’s creditors. Upon conclusion of the bankruptcy process, many (but not necessarily all) of a person’s remaining debts will be discharged. In a Chapter bankruptcy, known as a “wage earner’s plan,” the debtor will enter into a three- to five-year plan where they will make a set payment to a bankruptcy trustee each month. Upon conclusion of the plan, many (but not necessarily all) of a person’s remaining debts will be discharged.
Bankruptcy may be the answer to your financial problems
Bankruptcy has a negative stigma among some, but it is often the lifeline a person needs to address their unmanageable debt and move forward on fresh financial footing. To learn more about bankruptcy, we encourage you to explore our firm’s website for further information.