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Bankruptcy rates for older Americans are soaring

On Behalf of | Nov 13, 2019 | Bankruptcy |

The number of people filing for bankruptcy in Ohio and around the country who are 55 years of age or older has soared in recent years, and most of them are turning to debt relief because of unmanageable levels of medical debt. A study conducted by a University of Illinois law professor reveals that the number of bankruptcies filed by individuals between 55 and 64 years of age has increased by 66% since 1991, and the number of retired Americans seeking debt relief has surged by more than 200%.

This means that more than one in 10 bankruptcy filers is now 65 years of age or older. That figure stood at just 2% in 1991. While some older Americans pursue debt relief because of credit card or installment loan debt, most turn to bankruptcy after using all of their available resources to pay doctor and hospital bills. According to the University of Illinois study, 60% of the older Americans who file for bankruptcy each year do so because they have medical bills that they are unable to pay.

The medical bills that accompany illness or injury often leave older Americans in desperate financial situations. Many retirees live on a fixed income that barely covers their living expenses, and they might exhaust their savings to pay health care costs. Once their resources have been depleted, their Social Security benefits or retirement funds rarely provide them with enough money to meet their financial obligations.

The bankruptcy laws were written to provide Americans with an escape from overwhelming debt, and attorneys with experience in this area may explain how filing a Chapter 7 or Chapter 13 bankruptcy puts an end to harassment from bill collectors and offers the possibility of a fresh start. Attorneys may also point out that individuals who file for bankruptcy might remain in their homes and keep their cars and other personal possessions.