Financial (and Bankruptcy) Considerations for Older Americans
Credit card debt, medical expenses and lowered home values all contribute to financial difficulties later in life.
June 19, 2011
Financial (and Bankruptcy) Considerations for Older AmericansBankruptcy filings for those over 65 have increased dramatically over the last several years, with a 178 percent increase from 1991 to 2007, according to an AARP study. Several underlying issues are factoring into older Americans' financial problems. Credit card debt, medical expenses and lowered home values all contribute to financial difficulties later in life.
Credit Card Debt Increasing
According to a recent study by John Pottow, a professor at the University of Michigan Law School, credit cards are one of the main reasons for bankruptcy among those over 65. In fact, about two-thirds self-reported credit card debt as the key reason for bankruptcy, as opposed to about 50 percent for those under 65.
Pottow speculates that a lack of sophistication regarding credit card company practices, coping with everyday expenses on a fixed budget and an unwillingness to ask for help from friends and family all contribute to rising credit card debt for retirees. Often creditors will harass those in debt with phone calls and letters in an attempt to get payments. Some retirees may wish to use Chapter 7 or Chapter 13 bankruptcy to get rid of credit card debt and end bullying creditors.
Medical Expenses
Unexpected medical expenses account for a large portion of bankruptcies. While many people on Medicare believe their health insurance worries are over, the truth is there are gaps in Medicare coverage. Out-of-pocket health care costs and potential nursing home expenses can greatly reduce the savings of those over 65. Planning ahead to cover gaps in Medicare with private insurance and obtaining long-term care insurance that helps to cover possible nursing home expenses can help cover costs. If you are already in debt from unexpected medical expenses, you can get rid of that debt through bankruptcy.
Keeping Your Home and Your Savings
Most often a person's greatest asset is his or her home. Going through Chapter 13 bankruptcy is often a good way of saving your home, even if you are behind on mortgage payments. Freeing up current debt can allow you to keep your home and a lifetime's worth of savings.
Only a discussion with an experienced bankruptcy attorney will allow you to decide whether bankruptcy is a good option for you.
Article provided by Terry D Fisher
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