A new AARP study indicates seniors are filing for bankruptcy protection faster than other adults. Is this fact an indication of a new retirement plan for our Seniors?
The study showed that between 1991 and 2007 seniors aged 65 and older, who were overwhelmed with debt and unable to pay for rising medical costs, filed for bankruptcy 150 percent more than what they did in the past. The Consumer Bankruptcy Project found that among seniors aged 75 to 84, the rate of filing for bankruptcy protection increased by 433 percent. The study also noted that during the same time period, the number of younger Americans filing bankruptcy actually declined.
There is no clear cut reason made in the report for the rise in senior filings because no specific study for the reason why was done. Many observers reason that if the sagging U.S. economy, rising prices of food and gasoline, and uninsured medical expenses are driving many Americans to file bankruptcy, for the elderly living on a fixed income, these economic factors can drive them beyond filing bankruptcy and into poverty.
The seniors, who are being forced to file for bankruptcy in the droves, has probably not planned bankruptcy as part of their retirement. Nevertheless, when seniors cannot make financial ends meet, they are no different than any other Americans. They must file for bankruptcy in order to survive, protecting what little assets they have left.
The cost of living adjustments for social security, called COLAs, has not been increased since January of 2009. Many seniors lost their retirements during past stock market crashes, and all they have left is social security to rely on for retirement income. Inflation since January of 2009 has risen by 8.2%. That means the seniors on social security retirement are living on a little less than 92% of what they now make. The economy, along with the lack of a COLA has driven many seniors back into the work force, those lucky enough to get jobs that is.
Under the current circumstances, the fact seniors are filing more bankruptcies today is hardly an unusual phenomenon. It was once thought the Bankruptcy Abuse Protection and Consumer Protection Act of 2005 would prevent so many bankruptcies from occurring, or at least, that was the prevailing wishes of the creditor lobbying groups who were responsible for getting the new laws passed.
When the new bankruptcy law took effect in 2005, the number of people filing bankruptcy across all age groups temporarily fell. Even the stricter bankruptcy requirements were not enough to hold off many who were so smothered with debt that filing bankruptcy was the rational option. Soon the number of people filing bankruptcy began to rise again, and that number is probably most notable within the senior group of Americans.
If you are a senior who is currently experiencing the rising costs in living expenses and the rising costs in medical bills, you may need to consider making bankruptcy a part of your retirement plan.
Bankruptcy laws can be complicated, and it is recommended you consult with a bankruptcy lawyer in order to help you understand how the complicated process applies to you. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Hartford, Connecticut, contact us here today at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.
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