The face of bankruptcy filers is changing. Increasingly, older Americans are filing at high rates: a recent study found that the rate of Americans 65 and over who’ve turned to bankruptcy has tripled since 1991.
As a bankruptcy lawyer Memphis TN has turned to for more than 30 years now, I not only understand this trend but encourage older Americans who are struggling with debt to consider this option. Anyone who’s worked his or her entire life deserves to enjoy their post-retirement years, and it is never too late for a fresh start.
Too often, I find that older people are reluctant to take this approach. Filing for bankruptcy later in life can feel like an admission of failure. But no one should ever feel that way. There are valid external reasons bankruptcy has risen among this demographic. Here are three of them.
Insufficient Social Security
The cost of living continues to go up, but Social Security payments have failed to keep pace. Boston College’s Alicia Munnell told The Economist that for a person retiring at 65, “the replacement rate has fallen from 48% of pre-retirement earnings in 1980 to 38% in 2010.”
If you could supplement insufficient Social Security with pensions, that would be one thing. But many Americans can’t. According to the Employee Benefit Research Institute, 84% of private sector employees with a pension scheme had some form of a guaranteed retirement payment in 1979. In 2014, that percentage was down to 28%. What this means, of course, is that the burden of investment risks has gone from companies to the individual.
On top of lower and less steady income, many older people are burdened with increasing medical expenses. According to the Centers for Medicare and Medicaid spending, out-of-pocket spending for health for Americans over 65 was $2,938 in 2012.
With a shrinking safety net and overall living expenses on the rise, one unexpected life event like the loss of a spouse can completely shatter an older person’s savings. When you are unable to make ends meet, you often have to turn to credit. For an elderly person, that could mean you’re stuck in debt until your 90’s.
Talk to a bankruptcy lawyer Memphis trusts.
If you have questions or want to know more about filing for bankruptcy, I’m happy to help. We are known for our compassion — and results — and we’re here for you. Call 901-327-2100 or contact us here to start the conversation with a Memphis bankruptcy attorney.