Bankruptcy Stigma Fading As More Older Americans File
Americans aged 65 years and older are filing for personal bankruptcy in record numbers, according to recent studies. While filing for bankruptcy is no one’s ideal scenario, it is a useful and common tool for individuals facing mounting credit card and other debt. Continue reading for more about this trend among older Americans that file for bankruptcy, and contact a seasoned Maryland consumer attorney if you are facing mounting debt and want to know your options.
A Surge of Bankruptcy Filings Among the Older Population
According to a recently-released study based on data from the Consumer Bankruptcy Project, Americans over 65 are now three times more likely to file for bankruptcy than they were in 1991. Looking at data from 2013-2016, the study found that older Americans file for bankruptcy at twice the rate as the rest of the population, and account for one in seven bankruptcies (or 12.2 percent) filed during the time period observed, a more than five-fold increase from the 2.1 percent of all bankruptcy filers they represented in 1991.
Changes in Financial Landscape
The American population is aging: From 1991 to 2015, the percentage of Americans aged 65 and older increased from 17 percent to 19.3 percent. The authors of the study point out, however, that the increase in bankruptcy filings is too drastic to be fully explainable by the broader trend of an aging U.S. population. Instead, the likely culprits are increased financial burdens; for example, skyrocketing health care bills. Additionally, there has been a shift in recent years away from employers and the government caring for aging citizens with comprehensive retirement pensions and benefits. Instead, aging Americans are now responsible for an increasing share of their own financial health well past retirement age. This is illustrated by, for example, a shift away from pension plans in favor of 401(k) plans, for which the workers are responsible and which fluctuate with the markets rather than pay out on a monthly basis. The Great Recession caused many retirees to lose large portions of their retirement funds, on which they were more actively dependent than younger citizens. Senior citizens facing mounting debts are viewing bankruptcy more and more as the best option.
Bankruptcy is a viable option for older Americans
If these increasing numbers carry one positive element, it is that the days when bankruptcy was seen as a personal failure are now gone. Bankruptcy is simply another useful legal tool to overcome debt struggles. From 2005-2017, almost 13 million individuals filed for bankruptcy; it’s normal. Bankruptcy can help consumers, for example, reduce or eliminate debt or other consumer bills, gain extra time for repayment, avoid foreclosure or eviction, and stop or delay creditors from collection efforts such as garnishing wages or repossessing property.
Debt struggles can arise not because of any personal failure but simply because unexpected expenses come about, such as medical bills, which can be much more difficult to field for individuals living on a fixed income or a set pool of funds like retirees. Although starting fresh is a more difficult prospect for older citizens, bankruptcy can still be a viable option to ease financial stresses going into retirement. A qualified bankruptcy attorney can help find a plan that works best for the individual at whatever stage of their life or career.
If your consumer debt has grown out of control and you need skilled and compassionate legal help getting back on track, contact a Maryland bankruptcy lawyer at Haeger Law for a free consultation at 888-463-3520.