According to Consumer Affairs, there are over 50 million senior citizens in the United States. And, not surprisingly, Florida is the home of the largest number of seniors with 21 percent. With such a large population in our state, unfortunately many senior citizens face financial hardship. Consequently, more and more of them are filing for bankruptcy for debt relief. For example, I saw once report that said since 1991, the rate of senior citizens who file for bankruptcy has increased from 2.1% to 12.2%.
Unlike Millennials and younger generations, senior citizens are not being crushed by massive student debt. Likewise, most are not in financial trouble due to being behind on the mortgage. However, they are dealing with disproportionate medical debt. Many no longer have reliable or affordable health insurance. And as we age, our health problems can become more complex and expensive.
Even when a senior citizen doesn’t have a catastrophic illness or major health problem, the out-of-pocket costs add up quickly. Those on Medicare may still be responsible for significant expenses at the time when their income is limited or non-existent. According, 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 senior relying solely on their Social Security check for survival, this is certainly a large chunk of their income.
Another cause is fallout from co-signing loans for their adult children, including student loan debt. When the kids, now adults, do not pay back the loans, creditors come after the co-signers. Too often, the co-signers have more trouble repaying the loans because they are on a modest fixed income.
Obviously, predicting the future is a difficult task. However, the trend of senior citizens filing for bankruptcy will most likely continue. Unless major changes happen, health costs will continue to skyrocket. Safety nets, such as Social Security and Medicare, are constantly under attack. And credit card usage is up while personal savings and retirement accounts are in decline.
When senior citizens face financial hardship, what can be done? The answer is the bankruptcy process. Bankruptcy laws are in place to help people like our senior citizens. Their financial difficulties happen because of factors beyond their control. Therefore, there is no shame in filing for bankruptcy. So, if you or a loved one are facing bankruptcy, give me a call. I will listen and help you get to a better place.