Our later years are supposed to be fun and carefree. Not so if you’re declaring bankruptcy.
More and more people over age 55 are finding themselves having to file for bankruptcy as a way to get out of financial holes and to help rebuild their lives, not to mention their credit scores.
One report says people 55 and older are filing for bankruptcy protection 12 percent more than they did 13 years ago and that they currently represent 22 percent of all bankruptcy filings in the United States.
Reasons older Americans run into financial problems include healthcare, lack of a strong retirement plan, less funding from Social Security, having to help a son or daughter out of a financial mess and more.
Older Americans can have trouble obtaining decent medical insurance coverage and a number of their increasing medical expenses and prescriptions are not covered. Many must use credit cards to pay for medical treatment and drugs just to function on an everyday basis.
With people living longer these days, the problem appears that it will only get worse.
The U.S. Department of Commerce’s National Institute of Aging believes that by 2010, the number of people past the age 60 in this country will be increasing at a rate of three and a half times as high as that of the general population.
That prediction means people approaching retirement age must set aside funds to make it through the retirement years, especially with shortfalls predicted in Social Security.
Research shows that Social Security is the main source of income for the average older Chapter 7 debtor. For these individuals, credit card debt was the most noted type of debt discharged with the bankruptcy filing.
Adding to the problem is the deregulation of usury laws in most states, allowing for creditors to charge higher and higher interest rates, along with aggressive marketing programs geared toward seniors and added levels of credit extended.
Whatever the causes, older Americans are seeing themselves in real financial turmoil. They are looking to bankruptcy courts for relief from the debts that are overwhelming them, relief that many never thought they would need in the first place.