Bankruptcy is becoming more common among senior citizens. In fact, according to a new report from the Consumer Bankruptcy Project (CBP), the rate of new bankruptcy filings among people who are at least 65 years old has doubled since 2013. The average amount of debt that seniors who file for bankruptcy have is over $17,000.
The trend goes back farther than five years, however. In 1991, just over 2 percent of senior citizens were in some phase of bankruptcy. Now it's over 12 percent. CBP researchers expect that number to continue to rise.
So what explains this dramatic increase? The financial impact of retirement is one factor. However, there are many others, including:
- Increasing health care costs
- Higher out-of-pocket costs required by Medicare and other government programs
- Greater financial risks
- The difficulty rebounding from losing a job for older workers
- Credit card debt
As the older population in this country grows, there's concern that they'll place a strain on government programs designed to help seniors, such as Medicare and Social Security. The fact that people are living longer also means that many people have to stretch their retirement savings over more years.
No matter how old you are, if you are mired in debt and don't see a way out, it's worth exploring the impact that bankruptcy would have on your life and if it might be the best solution for you.
There are a number of differences between Chapter 7 and Chapter 13 bankruptcy. An experienced New York bankruptcy attorney can discuss both of them in detail with you and help you determine which of those would help you best accomplish your goals.