Bankruptcy for senior citizens can be beneficial for some. The National Council on Aging reports that retirement is far from “golden” for all older adults. Over 23 million Americans age 60 and older are “economically insecure” and subsist at the federal poverty level or below. These seniors struggle with everything from high health care bills and inadequate nutrition to a lack of reliable transportation. Many senior citizens fortunate enough to live above the poverty level could, with one adverse event in their lives, be pushed into financial insecurity as well.
When it comes to filing for bankruptcy, senior citizens often tend to be uneasy with the thought of this as a solution to debt relief. Indeed, Credit.com News reports that the demographic group that is usually the most emotionally resistant to filing for bankruptcy is senior citizens. However, seniors often find themselves needing the debt relief that bankruptcy can provide more than younger people with long working careers still ahead of them.
High Medical Bills and Prescription Drug Costs
Many senior citizens who are treading water in order to stay financially afloat did not get where they are merely because of some poor financial decisions they willingly made. In many cases, staggering medical costs are the primary culprit of their misfortune. CNBC reports that high medical bills and prescription drug costs are responsible for many bankruptcy filings. Other seniors may have been forced to rack up credit card debts merely to survive only to find that the high interests rates preclude them from every paying those debts off.
Student Loan Debt
Creditcards.com notes that a growing number of seniors face student loan debts they are having problems repaying. The amount of student loan debt carried by Americans aged 65 to 74 has quadrupled since 2010 and now tops $18 billion. It is noted that, while student loan debt is difficult to discharge in bankruptcy, some may be able to file for Chapter 7 bankruptcy relief in order to discharge some or all of their credit card and medical debts. Once these debts are discharged, many seniors may be in a better position to pay off their student loans.
Two Signs of Trouble to Watch For
Credit.com News also notes that there are two signs warning you that you may need to consider filing for bankruptcy. The first is when the financial hole you are in just keeps getting deeper despite your best efforts to pay down your debts and meet your financial obligations. Those who find it next to impossible to make the minimum payments on their bills are advised to give consideration to bankruptcy relief.
A second sign that you may want to consider filing for bankruptcy is when you begin raiding your retirement funds in order to “keep the wolf from the door.” The older you are, the more at risk you put your financial future by raiding retirement funds to pay down credit card or medical debts. With Americans living longer and longer lives, the odds are that you may not have sufficient retirement funds to subsist on if you spend them in what may prove to be a valiant but ultimately futile effort to try to pay down large debts.
Seeking Legal Advice
Senior citizens who find that their financial security is undermined due to debts that they can never hope to repay should contact one of our experienced bankruptcy attorneys. Before using up your precious retirement funds to help you pay down debts, ask an attorney to review your situation and advise you of your options.