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Data shows bankruptcy rates rising rapidly among older adults
Connecticut's population is aging at a faster rate than the national average, according to the most recent U.S. Census. Based on 2010 Census data, Connecticut is ranked ninth in the U.S. for residents age 65 and older - a major spike from just 10 years earlier, when it was ranked 15th. Unfortunately, for a growing number of older individuals in Connecticut and throughout the country, retirement has turned out to be a time of great financial difficulty.
Bankruptcy filings increasingly rapidly among seniors
While retirement was once widely viewed as a time of leisure and financial security, the social and economic circumstances in recent years have made this an unattainable ideal for many older people. A report by John Pottow, a professor at the University of Michigan Law School, showed that people age 65 and older are the fastest-growing group of bankruptcy filers in the nation.
The report, which was published in Elder Law Journal in 2011, showed that seniors age 65 and older accounted for just 2.1 percent of U.S. bankruptcy filings in 1991. By 2001, that figure had more than doubled to 4.5 percent, and by 2007 it had reached 7 percent. Meanwhile, the average age of a person filing for bankruptcy protection in the U.S. climbed from 36.5 in 1991 to 43 in 2007.
Seniors often carry more credit card debt
As with younger individuals who file for bankruptcy protection, credit card debts and medical bills are two of the main factors in bankruptcy filings among older individuals. Often, these financial challenges are even more pronounced among the elderly. With health care costs on the rise and incomes in decline due to higher unemployment, stagnant Social Security payouts and cuts to pensions and retirement plans, today's older individuals often end up feeling that they have little choice but to use credit cards to make ends meet.
Not only are older filers more likely to have credit card debt than their younger counterparts, but those who do tend to carry larger balances. The UMLS report showed that credit cards were a factor in about two-thirds of bankruptcy filings by older people, compared to about half among younger filers. Meanwhile, older filers carried an average credit card balance of more than $22,500, while younger filers owed about $13,600 on average.
Higher medical bills
Medical debts also tend to be high among older individuals due in part to the fact that medical problems tend to become more numerous and severe as people age. Unfortunately, many older people also experience a decline in income at the same time as their health care costs are rising.
Especially for those living on a fixed income, even routine care and medications can be difficult to afford. For seniors with more serious health concerns, the bills can quickly pile up and become unmanageable. Nearly four out of six older bankruptcy filers cited medical bills as a factor, the UMLS study showed. About 30 percent of people age 65 and older who file for bankruptcy report spending more than $5,000 or 10 percent of their annual income on medical expenses.
Talk to a lawyer about elder bankruptcy concerns
If you are approaching retirement age and are interested in learning more about your options for getting out of debt, consider speaking with an experienced bankruptcy lawyer about your situation. A lawyer with an in-depth understanding of bankruptcy and debt issues can help you weigh your options and pursue a course of action that will meet your needs.