Many Retired Americans Running Up Consumer Debt and Filing for Bankruptcy
Many retired Americans are becoming engulfed in consumer debt and filing for bankruptcy as a result. One report shows that people 55 and older are filing for bankruptcy protection 12 percent more than they did 13 years ago and that they currently account for 22 percent of all bankruptcy filings in the United States.
How do senior citizens who have always paid their bills on time and taken pride in having pristine credit records get to the point that they need bankruptcy protection?
Well, rising health care costs and expensive prescription drugs are partly to blame. The expenses add up, quickly depleting savings accounts and forcing the elderly to run up credit card bills to pay for life's essentials. Many seniors simply thought their retirement could be financed on their Social Security and have learned the hard way that they did not adequately plan ahead. Some retirees are drained financially by their adult children who still need a helping hand, and others fall into financial ruins when their spouses pass away.
Older Americans can have trouble getting adequate medical insurance coverage and many of their growing medical expenses and prescriptions are not covered. Many are forced to use credit cards to pay for medical treatment and drugs just so that they can live.
Whatever the cause, older Americans are finding themselves in real financial turmoil and are turning to the bankruptcy courts for relief from the debts that are overwhelming them.
Some studies show that in the 1990s senior citizens started really feeling the squeeze of unmanageable debt. The situation has continued to get worse over the years.
The elderly who are in trouble are frequently very embarrassed and don't know how to get help even if they had the courage to tell someone. Adult children often don't know that their parents are dependent on credit cards and that their finances are spiraling out of control until a heartbreaking call comes in after the house is in foreclosure or an eviction notice has been served.
Unsolicited credit card offers flood mailboxes of consumers all over America and prey on the vulnerable. When older people are unable to make ends meet any other way they often accept these offers and quickly max out the cards, never realizing that the high interest rates on these cards are eating them alive. As they accept more offers and try to keep up with minimum payments on the accounts, the balances continue to grow. The situation can very quickly get way out of control.
Some older Americans have taken out mortgages and second mortgage loans to try to meet their expenses, pay for health care and long term care. Many have fallen prey to predatory lending practices and are now faced with foreclosure because they can't make the payments and with the current housing market crisis, their homes are simply not worth the amount that they owe on them.
It's hard to tell when an older person may be in financial trouble and therefore very difficult for adult children or other relatives to know when someone needs help until it's too late. The rising rate of retired people filing for bankruptcy is some indication that perhaps we all need to keep our eyes open when it comes to detecting possible financial problems among the elderly people whom we love.