How to Evaluate the Causes of Bankruptcy Among the Elderly

The economy is making more people file petitions for bankruptcy, primarily senior citizens. The average income for the elderly (age 70 and over) is a little more than $1,500 in 2009, but the average income of other chapter 7 bankruptcy filers is more than $2,300. Social Security is the primary source of income for the elderly. According to AARP, an excessive amount of debt and increasing medical bills have caused bankruptcies among the elderly to increase by 150 percent from 1991 to 2007. The percentage is even higher for those aged 75 to 84 years of age.

Financial Status

Once you retire your entire financial situation changes. You are making less money but the expenses you incur are the same. There is food, medical expenses, prescriptions, miscellaneous expenses, housing, utilities and credit card debt. When your fulltime pay check is eliminated, you may have to juggle your debts and decide which creditors are going to be paid. This causes some to file a petition for bankruptcy. Many senior citizens receive Social Security which does not go far these days when you factor in inflation and the number of expenses that the elderly have.

Medical Bills/Health

One of the main factors that cause the elderly to file for bankruptcy is medical bills. If you are living on a limited income, it is difficult to repay an excessive amount of medical bills. This can really put a strain on the budget of an elderly person with a fixed income.
The elderly face a number of health issues including arthritis, high blood pressure, diabetes, overweight issues, and heart disease, which increase the need for prescription medication and a number of doctor visits. Some of these expenses are not covered and the elderly must pay out of pocket.

Predatory Lending

The elderly have been strapped with credit card debt along with home equity loans in an effort to meet everyday living expenses and other expenses. Some of the elderly have become victims of predatory lending practices which help increase their debt load and ultimately forced them into bankruptcy.

Age Discrimination

Many senior citizens have decided to look for employment to help with every day expenses, but due to the economy it is very difficult to find employment. Some employers have a tendency to discriminate based on age which makes it more difficult for the elderly to find employment. If there is not a source of income to supplement social security filing a petition for bankruptcy becomes a realistic solution.

Pension

The economy has caused a number of companies to go out of business. Some senior citizens have seen their pensions reduced or cut out altogether as a result. This further reduces the income they can count on to meet their every day expenses. When food and utilities costs continue to increase and income remains stagnant or is eradicated, senior citizens find themselves in a situation where bankruptcy is there only alternative.

Source: http://www.usdoj.gov/ust/eo/public_affairs/articles/docs/abi_042002.pdf

Source: http://www.betterbankruptcy.com/elderly-americans-face-bankruptcy.htm

Source: http://www.tfgi.com/200808/the-elderly-and-rising-bankruptcy/