According to a recent article in USA Today, the number of retired people that are filing for bankruptcy has significantly increased, and the rate was increasing even before the recession began.
According to a study conducted by the University of Michigan Law School, people aged 65-years-old and older are the fastest-growing part of the population that are filing for bankruptcy protection. The study also discovered that elderly Americans carry approximately 50 percent more credit card debt than younger Americans.
There are many facets to the problem. Once retired, a person’s expenses, such as medical bills and taxes, continue to rise, while their income declines. If long-term care is needed, it also significantly adds to expenses. Additionally, Social Security has not had an adjustment for cost-of-living inflation in a long time. Many senior citizens also suffered losses in their retirement and pension accounts during the height of the recession. Many more people are retiring while carrying a mortgage than previous generations, which also adds to costs. Often, these circumstances lead the elderly to attempt to live off their credit cards, only making matters worse.
Bankruptcy can be the best option for some retirees and may help stop the depletion on their limited income from creditors. Many elderly Americans mistakenly believe that filing for bankruptcy will drain their retirement accounts and leave them penniless. The reality is that retirement and Social Security accounts (up to roughly $1 million) are exempt from creditors, so retirees will continue to have a steady source of income after filing for bankruptcy. Also, medical bills and credit card debt are categorized as “unsecured debt”, which will likely be eliminated by bankruptcy.
If you have recently retired and find yourself struggling to pay your bills, filing for bankruptcy may be a good option for you. However, every person’s financial circumstances are different, and that is why it is wise to consult with a New Jersey bankruptcy lawyer who can help you determine the best course of action. At The Law Offices of Robert Manchel, our attorneys have helped many people in New Jersey understand and go through the bankruptcy process. Call our law office today at 866-503-5655 to learn how we can help you.