Bankruptcy can and does affect anyone at any time. All it takes is debt that cannot be paid back based on your current assets and income. But there’s been a disturbing trend recently of Americans over 65 declaring bankruptcy at an increasing rate, compared to younger generations. The numbers are double what they were 25 years ago. From 1996 to 2015, the increase of older Americans declaring bankruptcy staggering.
Why are more and more older Americans filing for personal bankruptcy?
A lot goes into the causes of bankruptcy. Growing debt, dwindling social security, the need to dip into your savings or 401k, riding cost of medical services all play a role in the dwindling assets of older Americans who find themselves in the red far more and far faster than they want to be.
To get an idea of what’s causing this trend and what to look for, we’ve put together a bit of an analysis on what goes into the declaration of bankruptcy from older Americans.
Medicare and Increasing Debt
Medicare is meant to help older Americans who no longer have employer provided health insurance. It covers a great deal, but not enough. Copays and certain deductibles start to take their toll on older Americans who lack steady income. Further, many common needs of senior citizens, such as hearing aids, dental procedures, and certain exams are not covered under Medicare. Most Americans are not actively taught to factor in the health costs into their retirement plans, so the extra costs take many by surprise and the result can be devastating to your finances.
Credit Card Bill Payment
Bills can take their toll on anyone. But one of the issues that arises with older Americans of Greatest Generation and Baby Boomers is that they either lived through the Great Depression or were raised by parents who did. The result is a reliance on cash payments for bills, rather than staggering payments through use of credit cards. The result is a quick decline in cash and a reluctance to switch to credit cards. Then suddenly, assets are gone.
Are Older Americans Reluctant to File Bankruptcy?
Due to the same emotions that cause the bill payment, despite lack of funds is the same thing that keeps older Americans from declaring bankruptcy until it’s much worse than it has to be. A drive to pay off debts and bills staves off the declaration but usually some sort of catalyst causes an eventual declaration, and it’s usually very stressful.
How Much Does Declaring Bankruptcy Cost?
Bankruptcy does come with some fees before you can start paying off. Depending on the type of personal bankruptcy you file, a court fee will apply. On top of this is the cost for a lawyer. There are also smaller fees in the range of $20 that can apply and cause some strife. Shop around to find a trusted bankruptcy firm with reasonable fees, they do exist.
Be prepared for the road ahead and don’t let retirement or the fees involved sneak up on you. There are hardships but being prepared and having a plan to overcome it is crucial.
You will find the bankruptcy lawyers at our legal practice in Massachusetts, compassionate and skilled at understanding the realities common to debt relief at any stage of life. At Hines Law we provide clear and practical advice so that our clients capture the best the legal system can offer. Our expertise includes Chapter 7 and Chapter 13 filing as well as assisting our clients implement a plan to rebuild their future. Find out what debt relief option is best for you and call us for a Free Case Evaluation!