I recently read an article in the New York Times about the incidence of bankruptcy filings among older Americans. I know from my own practice that I’ve seen more older clients in recent years than I did early in my career. Maybe this is a result of what the article discussed, or maybe not. At any rate, it’s an interesting topic.
Bankruptcy Filings Among Older Americans
According to the article, the rate of bankruptcy filings among those 65 or older has tripled since 1991, the year I first entered law practice. The article mentions several possible causes. Among these are vanishing pensions, rising healthcare costs, and inadequate savings. Also contributing to this phenomenon is the trend away from traditional pension plans to 401k type plans. This trend makes the individual more responsible for saving for retirement. Some people find this very hard to do given their current financial picture.
Declining incomes also have a role to play. With healthcare costs rising, and some incomes declining, some older Americans simply get caught in the middle. Often, a person can get by as long as there is no major problem to face. But a sudden illness or a loss of income can make “getting by” no longer possible. When this happens, something must give. And finding a second job to try to address the problem can be most difficult, if not impossible.
Another source of problems I’ve seen with older Americans relates to trying to help grandchildren or other relatives with their financial problems. Often, grandchildren are attempting to finance a post-secondary education and need a co-signer for student loans. This is not necessarily a problem until the student becomes unable to pay the student loans and the co-signer grandparent gets stuck with repayment on the loan.
What’s a Possible Solution?
Bankruptcy may be the only viable option remaining for older Americans who have encountered tough financial times. Chapter 7 bankruptcy can eliminate most types of debts and provide a fresh start. Chapter 13 debt consolidation can be an effective way to re-organize personal finances through an affordable re-payment plan. After certain conditions are satisfied in the Chapter 13, most remaining unpaid debt balances are forgiven and never have to be paid. As with all important life decisions, make sure you consult with a competent professional, in this case a consumer bankruptcy attorney, to learn about your best options.
The experienced bankruptcy attorneys at Bond & Botes, P.C. are here to answer your questions and help you come with possible solutions to your financial issues. Contact us today for a free initial consultation.