Bankruptcy Fears Adding More Gray Hairs to Our Aging Population
The past few years have seen a sharp uptick in bankruptcy filings across age, economic and cultural lines. Surprisingly, however, the biggest spike comes from people over the age of 65, a demographic that previously had one of the lowest levels of bankruptcy filings. Demos, a New York City-based public policy advocacy and research group, shows that there has been a 26% increase in the past five years alone.
A landmark 2010 study performed by the University of Michigan Law School demonstrates the huge rise in elder bankruptcy filings as well as another surprise: the average senior citizen seeking bankruptcy protection has nearly $23,000 in credit card debt.
Why Such a Big Jump in Filings Among the Elderly?
Study author John Pottow states that the “dominant force” in the elder bankruptcy epidemic is indeed overwhelming credit card debt, but that many other issues have contributed, including:
- Health problems
- Medical debt, including costs accrued for care received in a nursing home or assisted living facility
- Caring for vulnerable parents or children
- Increased housing costs
- Ballooning adjustable rate mortgage payments
- “Gray divorce,” the splitting of couples who have been married 20, 30, 40 years or more
- Increased life expectancy coupled with inadequate savings
- Lack of cost-of-living increases from Medicare, Social Security and other age-based social welfare benefits programs
- Loss of pension funds to fraudulent investors (like Bernie Madoff, whose Ponzi scheme defrauded millions to the tune of billions), a volatile stock market and banks that have gone under
- Unavailability of adequate employment to support economic needs, whether due to job loss, inability to find second jobs that aren’t too physically taxing or inability to work more hours because of health concerns
Another all-too-common financial challenge facing America’s senior population is that of financial abuse by loved ones and guardians. Countless Americans have seen their assets depleted not by investments or medical conditions but by the theft and fraud of those they trusted to protect their best interests. MetLife’s Mature Market Institute estimates that nearly $3 billion in money, property, real estate and other assets are stolen away from the elderly annually.
Regardless of why you or an elderly loved one are having financial difficulties, bankruptcy might be a viable option to help get you the debt relief you need. When you are considering filing for bankruptcy protection, you need to seek the advice of a skilled attorney in your area to learn more about your rights under the law and about the debt management options that best fit your unique financial situation.