When we think of individual bankruptcy, we think of particular groups of people. Most commonly, we think of students, younger individuals, and first-time homeowners. However, one segment of the American population is catching up when it comes to filing for bankruptcy. That group is senior citizens. Every year, more and more senior citizens file for bankruptcy.
Health Care Costs
I have seen several articles and reports that the increasing rate of senior citizens filing for bankruptcy. What gives? Usually, student loan debt is not crushing senior citizens. Likewise, they generally are not underwater on their mortgage. What they are dealing with is excessive medical debt. Many senior citizens do not have reliable health insurance. As they age, their health problems tend to become more complex and expensive.
Even when a senior citizen doesn’t have a catastrophic illness or significant health problem, the out-of-pocket costs add up quickly. Those on Medicare may still be responsible for substantial expenses when their income is limited or non-existent. For example, the Kaiser Family Foundation found that co-pays and out-of-pocket costs for Medicare accounted for 41% of the average Social Security check. For seniors who rely solely on their Social Security check to survive, that is a large part of their income.
Other senior citizens file for bankruptcy after co-signing on loans for their adult children, including student loan debt. When the adult children do not pay back the loans, the creditors come after the co-signer. Often, the co-signers are in a lousy position to pay because they live on a modest fixed income.
With the pandemic winding down, stimulus money drying up, and protections going away, there may be even more trouble for senior citizens on the horizon. These factors, combined with the seemingly continuously rising health care costs and attempts to cut back Social Security and Medicare benefits, do not bode well.
It is challenging to see senior citizens file for bankruptcy. If you or a loved one faces bankruptcy or financial hardship, it is essential to have an experienced lawyer. We will help you every step of the way so that an already bad situation does not become worse. To start, we offer a free, no-obligation information session to answer your questions and give you a clear understanding of your situation. Click here or text AskRon to 21000 if you would like to schedule your session.