The number of senior citizens filing for bankruptcy has increased by more than 200 percent in less than three decades. Social scientists who have studied this phenomenon point to a number of factors, including the rise in health care costs and a decline in pension income.
While many Americans assume that Medicare will cover their medical bills once they reach 65, the program doesn't cover all health care expenses. Fidelity Investments recently noted in a statement, "A 65-year old couple retiring this year will need $280,000 to cover health care and medical expenses throughout retirement." That's a significant jump from the company's estimate of $160,000 in 2002.
According to the Kaiser Family Foundation, older people spent more than 40 percent of the average Social Security income on out-of-pocket medical expenses in 2013. It expects that to rise to 50 percent by 2030. Seniors who are forced to retire early due to poor health are hit with a double whammy of medical bills and a loss of income.
Many seniors who were raised by parents who lived through the Great Depression and taught not to rack up credit card bills and other debt believe that filing for bankruptcy isn't something that honest people do. However, they're too often forced to place their medical bills and other expenses on their credit cards to survive. The problem is that they don't have the money to pay them down significantly. It's not until they're inundated with calls from collection agencies before they consider bankruptcy.
Americans are living longer. Many people find themselves spending their "Golden Years" taking care of parents in their 90s as well as adult children. A serious illness or accident on top of that can be devastating to an already precarious financial situation. An experienced Long Island bankruptcy attorney can review your debt relief options with you.