More People Over 55 Are Filing for Bankruptcy
October 22nd, 2008
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- Bankruptcy and reverse mortgages
Consumer bankruptcy filings rose 29% in September from a year earlier, according to the American Bankruptcy Institute. High levels of debt, heating costs, and falling home values are among the factors contributing to the rise in U.S bankruptcy filings. While Americans of all ages are finding themselves heading into bankruptcy court, it seems that the older people get, the more likely they’ll end up taking this route.
According to an article in the Wall Street Journal, people over 65 became twice as likely to file for bankruptcy. People over 55 accounted for 22% of bankruptcy filings in 2007, up from 8% in 1971. Those figures came from a study conducted by the Consumer Bankruptcy Project, which examined bankruptcy filings from 1991 to 2007. The main culprits that lead to bankruptcy among older people are jobs and medical costs. But don’t think that all those people who cited medical costs as a reason for bankruptcy didn’t have health insurance. Many of them do, but are forced to pay high premiums, deductibles, and other out-of-pocket costs that they just can’t afford.
Rising levels of credit card debt and high mortgage payments are also eating up a large percentage of many people’s income. Many workers aren’t seeing their income keep up with the cost of living, and retirees on fixed incomes are often forced to turn to credit cards just to pay their bills.
Whatever happens with the economy in the short- and long-term, one thing is for sure: Americans need to cut their debt levels any way they can. Many of the problems individual consumers are experiencing are related to the debt taken on to finance their lifestyles. Even if you aren’t a person who relies on credit to pay for things, it would be wise to cut spending and put as much money into savings as possible so you don’t find yourself heading into bankruptcy court down the line.