By: Gerri L. Elder
A new study indicates that elderly Americans are filing bankruptcy at a faster rate than other adults.
The study by AARP showed that between 1991 and 2007, the number of people aged 65 and older who were overwhelmed with debt and unable to pay medical bills and thus filed bankruptcy went up by 150 percent.
The Consumer Bankruptcy Project found that among people aged 75 to 84, the rate of filing bankruptcy had increased by 433 percent.
USA Today reported that although the study did not cite the specific reasons behind the increasing rate of senior citizens filing bankruptcy, many believe that the rising costs of uninsured medical bills have caused many elderly people to rack up unmanageable debts.
George Gaberlavage, director of consumer and state affairs at the AARP Public Policy Institute, told USA Today that out of pocket medical expenses have been going up and this has caused financial hardships for many elderly Americans. Gaberlavage says that he believes that health care costs are the largest cause of the increased number of senior citizens filing bankruptcy.
The study also noted that during the same time period, the number of younger Americans filing bankruptcy actually declined.
The initial report in the Consumer Bankruptcy Project by AARP based the 2007 bankruptcy statistics on a national sample of 2,435 responses from people who had filed bankruptcy. A later study promises to spell out the individual factors behind the increase in elderly Americans filing bankruptcy.
However, to many, the reason is already fairly clear. The sagging U.S. economy, rising prices of food and gasoline and uninsured medical expenses are driving many Americans to file bankruptcy, but for the elderly who are living on a fixed income, these economic factors can drive them beyond filing bankruptcy and into poverty.
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 stave off many people who were so smothered with debt that filing bankruptcy was the sanest option. Soon the number of people filing bankruptcy began to rise again.
The AARP study shows that senior citizens in the U.S. are being hit hardest by the poor economy and are unable to pay the large amount of uninsured medical bills that are piling up on them.
Social Security checks cannot stretch far enough to cover all of the expenses that elderly people now have. Many Americans are not prepared for retirement and have unpaid debts that they simply cannot pay on their limited incomes. When uninsured medical expenses begin to add up, many cannot make ends meet and find that filing bankruptcy is the only way to survive.
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