Filing for bankruptcy is never an easy decision, but one many elderly people are forced to make. A recent study by the Social Science Research Network revealed that from 1991 to 2016, the rate of Americans over 65 filing for bankruptcy has increased approximately 204 percent. Out of all the people that filed for bankruptcy over this period of time, the number of elderly people increased five times.
The study also addressed potential reasons for this increase in bankruptcy filings among the elderly. First, elderly people may have medical issues, and while Medicare covers some of them, many are not covered. For example, Medicare does not generally cover extensive medical procedures, hearing aids or dental procedures. Some people also cannot afford to pay the deductibles or copays required. Also, many people suffering from medical issues are also unable to work and find themselves drowning in medical bills, even with the help of Social Security. Financial experts say that a 65-year-old couple will need approximately $280,000 for their medical care during retirement.
Older adults also end up filing for bankruptcy when they start paying their bills with credit cards and only make minimum payments every month. As a result, their debt never reduces and as the years go by, it becomes nearly impossible for them to financially recover. Once the creditors start threatening to sue, elderly people find themselves considering bankruptcy.
Individuals of any age who are struggling with debt may consider filing for Chapter 7 bankruptcy. A Chapter 7 bankruptcy does not require a repayment plan and often requires the sale of the individual’s possessions, such as their house and cars, to pay off some of their debt. Chapter 7 bankruptcy is often best for Texas residents who do not have much income and are unable to pay back some of their debts. For more information on whether Chapter 7 bankruptcy is right for you, consider speaking with a bankruptcy law professional.