Americans, on average, are living longer than ever before. Unfortunately, many of them haven’t saved enough money to last for those extra years. According to AARP, bankruptcy filings have increased significantly for seniors 65 and older. Those between 75 and 84 have seen a massive increase in filings (433 percent between 1991 and 2007).
There are multiple reasons for this phenomenon. While many people continue working past the “traditional” retirement age of 65, either because they want to or they need to, some people retire without having the savings to last them for what couple be two or three more decades of life.
Some people are still paying a mortgage when they retire. That can take a big bite out of your retirement savings. While reverse mortgages are widely advertised to seniors, they’re not always the best solution to financial problems.
Medical debt is a big problem for people of all ages — including seniors. People who assume that Medicare would cover everything once they hit 65 are in for a rude awakening. Many medical expenses are not covered by the program.
Sadly, too many seniors start living off of their credit cards to make ends meet. Of course, that simply compounds the problem if they aren’t able to pay them off each month, and they end up paying considerable sums in interest and fees.
People who try to get their elderly parents to consider bankruptcy often find that seniors have more of an aversion to it than younger people. It may have been considered a source of shame in the era in which they grew up. However, it may be the best solution in some cases. It can relieve them of the burden of their credit card and medical debt, which can be discharged in a Chapter 7 filing. In the meantime, certain retirement accounts as well as Social Security benefits can’t be taken by creditors.
If you or someone you love is facing overwhelming debt that’s ruining what should be the golden years, you may want to consider talking with a New York bankruptcy attorney to discuss your options.
Source: Asian Journal, “Bankruptcy options for senior citizens,” Andrew Paranal, Esq., Jan. 28, 2017