Seniors Seeking Relief in Bankruptcy During Retirement
Many seniors live on fixed Social Security income with no cost-of-living adjustments to help them get by. Hit with high medical and credit card bills, retirees are increasingly turning to bankruptcy as a solution to their financial problems.
Senior Bankruptcy Statistics
A 2010 study from the University of Michigan Law School found that people age 65 and older are the fastest-growing segment of the U.S. population seeking bankruptcy protection.
According to AARP research, the number of Americans age 55 and older who filed for bankruptcy increased threefold from 1991 to 2007. The number of bankruptcy filings for people 75 to 84 years old quadrupled in the same time period.
Senior bankruptcy filings are especially common in Florida with so many retirees living in the Sunshine State. In past years, seniors struggling financially could tap the equity in their homes. But with Florida’s depressed housing market, that is often no longer a viable option for many aging residents. Indeed, a study by the Administrative Office of the U.S. Courts revealed that in states where the home price index decreased, bankruptcy filings increased by 118 percent.
Financial Problems in Retirement
A number of factors contribute to the growing phenomenon of bankruptcy in retirement. Many seniors face unmanageable debt from uninsured medical bills. Others’ retirement accounts suffered significant losses in the economic downturn.
In addition, when Social Security income is not enough to cover living expenses, some retirees use credit cards to pay for daily necessities like food and prescription medicine. Soon they end up with credit card bills and exponentially-increasing interest fees that they cannot afford to pay.
For many seniors struggling with debt, filing for bankruptcy is a way to get a fresh start. If you have overwhelming debt, contact an experienced bankruptcy lawyer in your area to determine whether bankruptcy is right for you.