An elderly couple worried that they would lose their home because the could not affort the co-pays and co-insurance not covered by Medicare.

They lived a comfortable life for many years after retirement by getting a reverse mortgage. But now in their 80’s,  they both had been hospitalized several times and were receiving frighteningly large medical bills.

Their pensions and social security did not leave them with a cushion for emergencies.

I explained that there was no emergency: collectors don’t sell homes; and retirement income is exempt from creditors. What property is safe from creditors and bankruptcy trustees? 

Bankruptcy might be a possibility in the future, if medical bills ended, to protect the home equity (value above the mortgage) for their children to inherit.

Each owner on the deed is entitled to $165,500 in home equity, which a bankruptcy trustee cannot take from them. Since there was less than $165,500 in equity in their house, the last to survive could still file for bankruptcy, as the sole owner of the house, and still get rid of the judgment liens, so the house could be sold and the equity given to the children instead of the creditors.