Tyler residents aged 65 and older who are struggling financially are not alone. Data show that more senior citizens are seeking debt relief by filing for bankruptcy than ever before.
The reasons for this, according to a recent study, go deeper than just the fact of an aging population. They have to do with the ways in which older Americans are saddled with the burdens of rising health care costs and, at the same time, fixed incomes. These factors have led to significant increases in both the number of older Americans filing for bankruptcy and the number of senior citizens with cases currently in bankruptcy proceedings.
On one hand, bankruptcy is an important form of protection for senior citizens. Their income — which may be no more than what Social Security provides — is often not enough to keep up with credit card and other debt payments. Chapter 7 bankruptcy can eliminate these types of unsecured debts, and older individuals who do not own a home or car may have little to lose in a liquidation bankruptcy.
However, filing for bankruptcy before one reaches retirement age can have some advantages over waiting. Clearing one’s debts and obtaining a fresh financial start earlier in life means more time to rebuild savings and plan for a more secure retirement. Waiting until past retirement age still provides the much-needed discharge of unsecured debt, but without that extra time to recover financially.
With the median bankruptcy of senior citizens today lists a negative net worth of around $17,000, it is clear that the financial challenges facing older Americans today are not going away any time soon. A legal professional can advise individuals at any stage of life as to how they might be able to use Chapter 7 bankruptcy to their advantage.