Seniors Hit By the Economic Crisis Are Turning to Bankruptcy for Help

Published Monday, June 1, 2009 @ 12:30 pm

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Your “Golden Years” are supposed to be the best time of your life. You shouldn’t be worrying about bills, going to work, or holding an “upside-down” mortgage. These years are supposed to be the fruit of your life’s labor, and you should be able to enjoy them – or least not have to juggle the kinds of responsibilities and concerns you did in your 20’s and 30’s. Until recently, with a modest amount of planning and investment toward retirement, this was a reachable goal for most Americans.

Sadly, the economic conditions of the last 10 to 15 years have increasingly strained the budgets of seniors. Most people in their retirement years are on a fixed income, determined some years before they actually retire. But the cost of goods and services keeps rising, and the rate of those increases has outpaced the earning capacity of most seniors. This has meant that people who had planned to have their mortgages paid off are still left with a high principal balance at retirement. In addition, the medical services seniors need as they grow older keep getting more expensive every year, often causing a pile-up of unexpected (and unaffordable) medical bills.

This situation has forced many seniors to rely on credit cards to pay for things – including simple necessities. While in the past they may have been able to draw from the equity in their home to cover their expenses. However, with the housing bust, this is no longer an option for many. Continuing to work beyond retirement age is becoming more common. But in an increasingly brutal job market, seniors are often the first to be laid off, and the last to find new employment, Accordingly, seniors are slipping further and further behind. According to a September, 2008 AARP study, almost 700,000 seniors (about 28% of all homeowners) were either delinquent on their first mortgage, in the process of foreclosure, or had already lost their homes.

Filing bankruptcy is often the best option for those suffering with these sorts of financial problems. Indeed, the bankruptcy filing statistics show many seniors have begun taking advantage of the bankruptcy protection. Over the last decade, the filing rates for individuals 75 to 84 years of age has increased over 400%. For those between the ages of 65 and 74, the rates have doubled during this time. In 2007, 23% of those who filed bankruptcy were 55 years or older. And, as the economy continues to decline, and our nation’s elderly population continues to grow, bankruptcy protection will increasingly be utilized to protect the assets and livelihood of senior citizens.

Don’t struggle to make ends meet one more day. If you are a senior worrying about your debts, call a bankruptcy attorney now and learn how bankruptcy law can protect you and your retirement.

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