Rates of Bankruptcy Filings Among Older Americans Increasing
A perfect economic storm has been brewing for quite some time for a certain segment of our population: the senior class. As it turns out, since 1991, that storm has precipitated a 204% increase in bankruptcy filings among Americans between the ages of 65 to 74. Yes, that’s right, a 204% increase in filings in the span of three short decades. https://www.nytimes.com/2018/08/05/business/bankruptcy-older-americans.html
What could have caused this meteoric rise in economic hardship amongst the group of our populace who should be enjoying the twilight years of their lives playing golf and bridge with friends? Surprisingly, or maybe not so much depending on who you ask, it has nothing to do with frivolous spending. Quite the contrary, actually.
Instead of having early access to social security income, pensions being replaced with forced savings plans, a considerable increase in regular household expenses, most notably, health care, and inflation, as a study from the Consumer Bankruptcy Project puts it, “when the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give . . . and older Americans turn to what little is left of the social safety net—bankruptcy court.”
The situation is a tough one, as bankruptcy may offer a “fresh start” to most debtors who decide to file, it often represents a last case resort to an individual or joint filer who do not have enough years to regain the wealth necessary to retire without having to work one or two part time jobs in order to make ends meet.
So what can be done? In the immediate future, without a congressional focus on social safety net programs to help offset some of the burden older Americans are currently facing, the solution seems to be bankruptcy. If bankruptcy is a last resort for most Americans, it does not have to be perceived that way. Often times, when the potential client enters the doors of a bankruptcy attorney for a consultation, it is after they have tried to mend the economic bridge by tapping into retirement savings, home equity, and other asset, many of which would otherwise be exempt or protected in a bankruptcy filing. Once these assets are exhausted, it is not untrue that getting them back, after a lifetime of building, will be a difficult proposition after a bankruptcy in the later years of one’s life. The objective should be to get ahead of the game, don’t exhaust resources to pay off debt if bankruptcy can offer debt relief while protecting your assets at the same time. If you or anyone you know finds themselves in this situation, please consult with a bankruptcy attorney to discuss your options.