Instead of saving for retirement, a growing number of elderly Americans are instead preparing to file for Chapter 7 bankruptcy. At least that’s what the results of a new survey say.
According to a recent story in USA Today, the Consumer Bankruptcy Project found that bankruptcy filings by those 65 and older jumped by 150 percent from 1991 to 2007. At the same time, bankruptcy filings for U.S. residents from the ages of 75 to 84 increased 433 percent.
From these unsettling numbers, it seems that more elderly Americans will soon need to learn how to claim bankruptcy.
This is a shame: U.S. residents who are nearing their retirement ages are supposed to be worrying about how much money they’ll need to save to spend their post-working years in a state of peace. They’re not supposed to learning the ins and outs of how to file bankruptcy.
However, this is exactly what is happening. As usual, blame falls on the struggling national economy. Older Americans are facing the same problems that all U.S. residents are facing: Some have lost their jobs late in life. Others have had to cope with medical bills that are simply overwhelming. Still others have watched as their homes have fallen in value. Many U.S. residents had been counting on their homes’ ever-increasing values to help fund their retirement years. The Great Recession has certainly scuttled that dream.
Of course, the entire country is struggling these days, or so it seems. The number of bankruptcy filings, both of Chapter 7 bankruptcy and Chapter 13 claims, is on the rise. Bankruptcy filings aren’t discriminating based on age, gender, or wealth. U.S. residents of all kinds are facing overwhelming debt and declining yearly incomes.
It’s a situation that won’t improve until the national economy shows some sign of regaining momentum. Unfortunately, it doesn’t look as if this is going to happen any time soon. Yes, it’s true that officially the economy is in recovery mode, but because unemployment remains so high, and because home values continue to fall or remain stagnant, the recovery doesn’t feel like one.
Older Americans struggling with their finances do have some options to avoid Chapter 13 or Chapter 7 bankruptcy. They can try to borrow money from family members. They can work with non-profit credit counselors to set up budgets that allow them to pay down their outstanding debt. They can also take out debt consolidation loans or work with debt settlement providers. Of course, none of these options is perfect. They call come with negatives, everything from high fees and interest rates to the embarrassment of asking family members for financial help.
Older residents should consider all options. Filing for Chapter 7 bankruptcy is expensive, and it devastates credit scores. This is no way for people to start their retirement years.
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