Filing for bankruptcy is one of the worst financial hits you can take in your life. It will follow you everywhere you go. Recovering from the blow is hard, and it can take up to a decade for the ding to fall off of your credit report completely. If you are in the middle of your retirement, however, things are a little different. You’re already on a fixed income, and your working years have long since passed.
A recent study done by the University of Michigan Law School found that since the recession began, people ages 65 and older have become the most rapidly growing portion of the population filing for bankruptcy protection. If you suffer a financial meltdown during your golden years, how will it affect you and those you love?
Bankruptcy during Retirement: Could it Be a Good Thing?
Unbelievably, older Americans carry an average of 50% more credit card debt than the generations that came after them. Senior citizens are losing their income from work, and the fixed income they’re left with is not enough to pay their medical bills – even after Medicare pays. That’s the most common misconception that gets this group on trouble. Medicare pays, but there are still quite a few out-of-pocket expenses that seniors must cough up the money for, and longer life spans mean that they’ll be ponying up this money for a much greater period of time than they may have originally thought.
This problem is compounded by the fact that many senior citizens are too proud to ask for assistance from their children or grandchildren, so they hide the debt in an attempt to manage the problem on their own by paying the minimums on credit cards and consumer lines of credit. Eventually, the debt repayments catch up to them and they can no longer stay afloat. That’s when bankruptcy protection may just be exactly what the doctor ordered. For an older filer, bankruptcy will carry the one-two punch of stopping the collection calls and reducing monthly out of pocket expenses back to the realm of affordability. This is a great way for seniors to be able to enjoy their golden years again.
The fixed income that senior citizens live on is one amount for the rest of their lives. Many seniors get minimum wage jobs to help with bills when they should not be working. Bankruptcy is the best way to avoid this last resort and spend the money on everyday expenses instead of credit card interest.