Senior Citizens Use Bankruptcy to Combat Increased Medical Bills
According to a study from the Consumer Bankruptcy Project, more and more retirees and elder Americans are turning to bankruptcy to fend off financial problems. The study indicates that the number of individuals 65 and older who are seeking bankruptcy protection has tripled since 1991. Over a three-year period from 2013 to 2016, an average of 3.6 bankruptcy petitionswere filed for every 1,000 people over the age of 65. Less than three decades earlier, that number was just 1.2 per 1000.
Researchers found that the primary cause for the increase is the shift over the last 30 years of the financial risks and needs of retirement from the government and employers to individuals, who are bearing more financial responsibility as social safety nets dwindle. Most people must wait longer to collect social security benefits. In addition, employer-sponsored retirement plans, which used to be more or less guaranteed, have been replaced with voluntary retirement options, such as 401(k)s and IRAs.
Increasing Medical Costs the Primary Factor
According to an article in the American Journal of Public Health, approximately two of every three bankruptcy filings in the United States are related to unmanageable medical debt—more than half a million petitions every year. With health costs rising every year, it’s estimated that a couple retiring in 2019 will need nearly $300,000 to pay for medical care in retirement.
How Bankruptcy Filing Can Help Senior Citizens
In a Chapter 7 bankruptcy, you typically can discharge most types of unsecured debt in exchange for transferring certain non-exempt assets to the bankruptcy estate to be liquidated or sold to make payments to creditors. Medical debt is one of the most common types of debt discharged in Chapter 7. In addition, there are exemptions under the bankruptcy code that allow you to keep most, if not all, of your property.
Contact Our Offices
At the Law Office of Andrew B. Finberg, LLC, we offer experienced bankruptcy counsel to individuals in Burlington, Camden, and Gloucester counties in New Jersey. To schedule an appointment, call our office at 856-988-9055 (toll-free at 866-721-7269) or contact us online.