More baby boomers are filing for bankruptcy than in previous generations, according to recent reports. Consumers over the age of 65 are reporting more debt now than ever before, and as a result, more of these individuals are filing for bankruptcy as a means of getting out from under this debt burden.
According to figures from the Consumer Bankruptcy Project, the number of people over the age of 65 who have filed for bankruptcy has tripled since 1991. The study looked at 895 personal bankruptcy cases involving filers ranging in age from 19 to 92. What they found was more older Americans are filing for bankruptcy as a way to seek protection from creditors and protect their assets. In fact, the number of filers in this age group has increased anywhere between 200 and 300 percent since 1991.
What is leading to this increase in senior Americans filing for bankruptcy? Experts point to several factors, including delays in receiving full Social Security benefits, more pension plans being replaced by 401(k) plans, decreasing incomes, and a sharp increase in out-of-pocket medical expenses. Not all seniors are facing all these factors at once, but many of them are struggling to pay their daily living expenses, as well as unexpected debt, including credit card debt and high medical bills.
Many seniors are also simply outliving their money. They are living longer, combined with medical expenses and a higher cost of living, which puts them in a tight financial situation. Many are already living on fixed incomes, so it only takes one major medical crisis to set them back thousands of dollars.
According to a study by the American Journal of Public Health, more than 66 percent of all bankruptcies, regardless of age, cite medical bills or time away from work due to a medical issue as the reason for bankruptcy. Older Americans naturally suffer from more medical ailments, which puts them at a higher risk of incurring medical debt.
This increase in senior bankruptcy filings over the course of the past 30 years can also be attributed to the fact that credit cards and student loan debt were not an issue for previous generations as they are now. The parents of baby boomers did not have to worry about student loan debt. Many boomers choose to take out student loans either for themselves or for a child or grandchild so that they can attend a college or university.
Credit card debt has also become a bigger issue with the elderly. Debt carried by the generation before the baby boomers, known as the silent generation, who are now 74 to 95 years old, has gone up from 5 percent in 1989 to almost 50 percent in 2016. Many of these individuals are using credit cards as a means of paying for unexpected expenses, only to find that they are not able to pay off the debt once it is incurred. Others are resorting to bankruptcy as a means of eliminating it before it gets to that point.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.