As a bankruptcy lawyer Memphis TN has turned to for more than 30 years now, I have seen that more and more elders are turning to bankruptcy as of late. According to recent studies, 1 in 7 bankruptcy filers in the United States is age 65 or older.
That’s nearly five times as many seniors as 25 years ago. In 1991, Americans 65 and older made up 2% of all bankruptcy filers. In 2016, 133,000 seniors filed for bankruptcy, more than 12% of the 800,000 households who filed that year.
Why are more seniors filing for bankruptcy? Multiple factors are at play.
- A high percentage of bankruptcies across all age groups are related to medical issues and health care. If you are struggling to make ends meet, expensive medical bills, or time off from work related to a health condition, can set you back. As life expectancy grows and more seniors live longer, they face higher medical costs. According to the Centers for Medicare and Medicaid Services, out-of-pocket health costs for Americans over 65 were $2,938 in 2012. Many people without savings or a pension to support their health expenses turn to bankruptcy.
- There is a correlation between the changes in banks’ business models for credit cards and the rise in debt. As Teresa Ghilarducci wrote in a recent article for Forbes, “According to the Federal Reserve’s Survey of Consumer Finances, 60% of senior households had debt in 2016 and 29% of senior households owed money on mortgages or other housing debt. These rates represent a roughly 50% increase in the share of senior households holding debt over the last 25 years.”
- Social Security payments failed to keep up with the rising cost of living; for a person retiring at 65, the replacement rate of pre-retirement earnings has fallen from 48% in 1980 to 38% in 2010. On top of that, seniors cannot count on pensions for security. The burden of investment risks now rests on the shoulders of the individual rather than their employer.
There’s no shame in filing for bankruptcy, no matter your age.
If you’re age 65 or older, you should be relaxing in this time of your life, not worrying about debt. You’ve worked hard and deserve peace of mind. The last thing you need is harassment from creditors.
As a bankruptcy lawyer Memphis TN trusts, I meet many seniors who believe filing for bankruptcy is a sign of failure. Let the reasons I’ve outlined above reassure you that this is not true, and you are not alone.
If you have questions, I’m a bankruptcy lawyer Memphis TN counts on, and I’m happy to help. Call 901-327-2100 or contact us here to start the conversation.