Many dream of the golden years when they can retire and perhaps spend time with the grandchildren or travel. Now data from a wide range of sources shows that the elderly are filing bankruptcy at five times the rate they did as recently as 1991.
According to a recent report by CBS, seniors 65 and older file over 12 percent of all bankruptcies. With Americans living longer and longer, they are becoming increasingly larger part of the general population. This combined with the rising percentage of seniors filing bankruptcy likely leads to serious trend down the line.
Why seniors are filing
Everyone has their theories, but some general themes have emerged tied to risky financial behavior leaving the elderly in holes that are hard to climb out of. Reasons for this are:
- The rising age of retirement
- Requiring seniors to pay more out of pocket for medical expenses
- Americans are now more likely to retire with a private retirement account like a 401(k) where workers make their own investment choices and saving decisions
- Seniors are now more likely to carry a mortgage and credit card debt in their 60s and 70s
- They may have catastrophic setback due to illness or poor financial choices, and do not have enough years of work ahead of them to rebuild a nest egg.
- It is harder for the elderly to find and maintain suitable employment
- The cost of living continues to rise
- Some wait too long to file bankruptcy and there is nothing left to protect
Coming storm of broke elderly
The trick is to be aware of the ramifications of financial decisions and get help before it is too late. Attorneys with bankruptcy experience can help determine the right course of action, whether it is Chapter 11 or Chapter 7. By addressing issues early, it leaves those filing for bankruptcy more options for resolving them.