Many Americans are struggling with overwhelming debt and facing hardships like unemployment and foreclosure. One section of the population tends to be forgotten when we consider those who are seeking bankruptcy protection to obtain a fresh financial start: the elderly. However, elderly Americans are suffering just like everyone else.
In fact, Forbes says that the percentage of Americans aged 65 or older who filed for bankruptcy has grown from 2.1 percent in 1991 to 7 percent in 2007. Overall, the age of those filing for bankruptcy has increased over the years. The median age of individuals filing for bankruptcy increased from 36.5 to 43 years old between the years of 1991 and 2007.
Older individuals live on a fixed income and often rely on Social Security, pensions or savings. When those sources are not enough to cover their cost of living, they might turn to credit cards to supplement their income. However, this practice often leaves the elderly with significant debt and no means of paying it back.
John Pottow, a professor at Michigan University Law School, conducted a study that revealed that credit card debt is the primary cause of bankruptcy for elderly Americans. According to Forbes, data from the Consumer Bankruptcy Project show that more than two-thirds of elderly individuals who file for bankruptcy protection list credit card debt and high interest rates as their reason for filing. Meanwhile, only 53 percent of younger adults blame credit cards for their decision to file for bankruptcy.
Pottow also noted that elderly Americans are less likely to ask their family member or friends for financial assistance. Additionally, older individuals are less likely to negotiate with their creditors before filing for bankruptcy.
Source: Credit.com “Elderly bankruptcy filings rooted in credit card debt” 13 October 2010