An obvious reason the elderly may use bankruptcy is to seek a discharge of their debts. Bankruptcy provides a benefit when the creditors could reach an elderly person’s assets. Sometimes a person does not need bankruptcy, such as when their assets are small or exempt (e.g. retirement accounts, social security income). In this instance, bankruptcy may provide peace of mind, but it may not be necessary to protect assets. If an elderly person or couple have assets with equity and too much debt, they may no longer have the ability to sell their assets or deal with claims.
Cheryl E. Rose, Chapter 7 Trustee, who serves the Bankruptcy Court in Greenbelt, Maryland, encountered a tragic case involving an elderly couple whose money was allegedly stolen by an insurance adjuster. The County police discovered the couple living in a van during the heat of summer outside of a burned home. The Circuit Court appointed a Guardian for the couple.
Upon investigation, the couple had no money for their care or to pursue a claim against the adjuster. The adjuster, who was authorized to receive communications for the elderly couple, received checks from the couple’s insurer. The adjuster deposited the checks, without a signature from the mortgage holder, and probably a forged signature from the couple. These checks totaled approximately $250,000. In addition, the couple’s mortgage company had a deficiency claim after foreclosure against the couple, who had more than $40,000 in other debts.
The Guardian thought that a bankruptcy trustee may be able to recover the money since the elderly couple did not have the capability or resources to do so. The Circuit Court was very concerned about the couple and authorized the Guardian to file a bankruptcy proceeding. Under the threat of litigation by the Trustee, the adjuster turned over $40,000 of misappropriated funds. The Trustee then attached another $31,000 of funds in the adjuster’s accounts. With the Guardian’s input and approval, Ms. Rose has filed suit against the adjuster, his spouse, and his business. She also is pursuing collection from a financial institution that deposited checks that had missing or forged endorsements. Any recovery in excess of the couple’s debts may go to the couple.
Cheryl E. Rose and the Guardian have shown great compassion and creativity to assist the elderly couple to recover assets when the couple could not do so themselves. The bankruptcy process utilizes federal rights and powers to protect all people and businesses that file for bankruptcy. Although the elderly couple is not competent to handle their affairs and had no money to do so, the Trustee helped them. The Trustee anticipates paying all claims in full and providing the surplus to the Guardian for the couple’s continuing care. See In re Pickens, Case No. 17-12253, Adv. Proc. No. 18-00027.
Questions about this topic or other bankruptcy law issues?
Please contact James Hoffman at firstname.lastname@example.org
James Hoffman is a corporate, bankruptcy and litigation attorney who focuses his practice in the areas of representing various business types, particularly closely held businesses and also has a broad base of experience representing creditors, trustees and debtors in bankruptcy cases and litigation.
ABOUT JAMES HOFFMAN
James Hoffman is a corporate, bankruptcy and litigation attorney. Mr. Hoffman focuses his practice in the areas of representing various business types, particularly closely held businesses and also has a broad base of experience representing creditors, trustees and debtors in bankruptcy cases and litigation. In his business practice, Mr. Hoffman represents businesses through their life cycles from creation, to formulating employment and shareholders agreements, creating contracts, collecting debts and closing the business through sale or liquidation. Mr. Hoffman has represented nine different Chapter 7 trustees, and several Chapter 11 trustees and receivers. Thus, he is “a lawyer’s lawyer.” He has been involved in handling a broad range of litigation before state courts, including disputes involving complex commercial litigation, breach of contract actions, and collection actions.
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