As Americans grow older, we face increasing challenges, and too many of us are facing a new problem in what should be the “golden years” of retirement — the need to file for bankruptcy.
According to an article in The New York Times, citing a study from the Consumer Bankruptcy Project, the rate of people 65 and older filing for bankruptcy has tripled since 1991. From February 2013 to November 2016, there were 3.6 bankruptcy filers per 1,000 people aged 65 to 74; in 1991, there were 1.2. Older Americans also account for an increased share of all filers — 12.2 percent are now 65 or older, up from 2.1 percent in 1991.
The situation is troubling, because older people who get into financial trouble have few places to turn, often are dealing with declining health, have difficulty finding jobs, and don’t have enough time to recover and get back on their feet. Filing for bankruptcy becomes their last option.
If you are an older individual struggling with debt, there is help available. The skilled and seasoned Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand that even the most well-intentioned people can find themselves in a financial hole. We offer a free consultation to evaluate your financial situation and examine your income, debts, and goals. Contact us online or call our offices for your free consultation so we can determine what debt relief solutions will work best for you.
Reasons Why Older Americans File Bankruptcy
The social safety nets Americans once counted on are shrinking, leaving older people vulnerable to financial disaster. Problems that lead to bankruptcy include:
- Increased risk. There has been a three-decade shift of financial risk from government and employers to individuals, who are bearing an ever-greater responsibility for their own financial well-being.
- Vanishing pensions. Employer-provided pensions are being replaced by 401(k) savings plans. These leave older people at the mercy of the stock market and their own investing abilities. At the same time, the eligibility age to receive full Social Security benefits has increased.
- Lack of jobs. While people need to keep working longer to get full benefits, employers are often reluctant to hire and invest in training for elderly individuals. People who lose a job before retirement age, especially those with physical or medical limitations, have great difficulty finding someone to hire them, and if they do, it is often for a lower salary.
- More health care spending. Health insurance costs, out-of-pocket spending, and cost of medications have all escalated. Even people with insurance can be stuck with high co-pays or get hit with a major illness where treatments or medications may not all be covered. Baby boomers are entering their senior years with greater health risks such as obesity and diabetes that lead to increased costs.
- Declining incomes and savings. Income generally falls during the retirement years, and if savings are not enough to cover costs, they quickly dwindle. According to a NerdWallet study, working baby boomers are saving only 5% of their income, not enough for a financial cushion. A survey by the Insured Retirement Institute showed that only 23% of baby boomers think their savings will last through retirement — and only 54% had any retirement savings at all.
- Too much debt. People may run up charges on their credit cards to cover bills, only to find they can’t pay the increased interest and fees. They may take on a second mortgage, equity loan, or payday loan, only to find themselves further in debt. The percentage of those carrying mortgage debt nearly doubled from 1989 to 2016, and some older people still struggle to pay off student loan debt.
- Supporting family. Older individuals often have spent or still are spending money to help children or older parents. Many parents cosign loans for their children, and caring for elderly parents comes at a huge cost.
- Longer life-span. Baby boomers are expected to live longer than previous generations, so those who retire in their mid-60s to early 70s need to cover an additional five to 10 years of retirement.
What Bankruptcy Can Do
As a result of these increased financial burdens, it’s no wonder that struggling seniors turn to bankruptcy. Bankruptcy is a legal way to have many debts forgiven and provide a fresh financial start. The most common types are Chapter 7 and Chapter 13.
- Chapter 7 bankruptcy can discharge (eliminate) most or all consumer and/or business debts so they no longer have to be paid. Chapter 7 bankruptcy is over in a few months; and while you might have to sell property to help pay off creditors, there are Ohio bankruptcy exemptions that cannot be sold, and you might even qualify for a “no asset” case.
- Chapter 13 bankruptcy allows you to repay some or all of your debt affordably over a three- to five-year period. If you successfully complete the court-approved payment plan, the debts covered by the plan are discharged, and you may get to keep assets such as your house and car.
Contact Us and Get Help
If you are a senior and your financial problems have become overwhelming, you should seek legal assistance. Going through bankruptcy on your own still brings the same filing and court fees as using an attorney, and even the simplest bankruptcy cases require completing extensive forms, researching exemption laws, and following all local court rules within certain time limits. Making mistakes or filing incorrectly could result in paying more or having your bankruptcy dismissed without eliminating your debts.
The experienced and compassionate Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer can provide a helping hand. We offer a free consultation to evaluate your entire financial situation. We will make sure you are aware of all your options and help you decide on the path to a brighter future that makes sense in your individual case. We understand what you are going through and will handle every phase of the process.
Don’t delay. Contact us online or call our offices today to set up your free consultation.