For the first time in a long time, the overall number of consumer bankruptcy filings increased last year, but gray bankruptcies have been increasing in number every year since 1991. A “gray bankruptcy” is the term for a bankruptcy filed by someone over the age of 65, and it’s a growing problem in America that needs more attention.
According to the National Consumer Law Center, people 65 and older have approximately four times as much credit card debt as people 25 and younger. This is not that surprising, if you think about it… Between increasing medical bills and the shrinking of social services, many older adults are experiencing increasing financial hardship.
It does not take much to send most Americans into a debt free-fall – unexpected job loss and medical bills are the two most common causes of bankruptcy cases. Once you have retired, you live on a fixed income, so a sudden large medical bill could result in financial disaster. Older Americans have had to turn to credit cards to simply make ends meet.
If you are over 65 and facing a debt that seems impossible to pay off, it is likely that several factors have influenced your financial situation:
- You have likely faced drastically increased health care costs
- Gaps in your Medicare coverage have made it harder to cover health care
- You have probably had to wait longer to receive Social Security benefits
- Your Social Security benefits are not enough to cover increasing costs of health care
- Your savings have been depleted
- You have had to rely heavily on credit cards to pay bills
Financial implications of a gray bankruptcy
Federal bankruptcy laws were created to help people escape from unmanageable debt, regardless of their age. If you are 65 or older and facing out-of-control debt, filing for bankruptcy can help you protect your valuable assets.
Most importantly, your retirement savings are protected in a bankruptcy case. This includes your 401(k), IRA, pension, or other long-term retirement savings accounts. This is important, since for many Dallas-area residents, these accounts can be substantial.
Government benefits such as Social Security are also protected by bankruptcy laws. Since many older people rely on these benefits (or even rely exclusively on them), it is important to understand that a bankruptcy case will not affect these benefits. If you are on VA disability, worker’s compensation, or other government-sponsored benefits, they are protected as well.
Call an experienced Dallas bankruptcy lawyer
If you are over 65 and struggling with out-of-control debt, the team at Rubin & Associates can help! Call us at 214-760-7777 to schedule a free consultation with one of our experienced bankruptcy lawyers. We will listen to the details of your financial situation and explain all of the available options. We want to help you make the best decision for your unique situation – the sooner you call us, the sooner we can start working for you to help you get the fresh start you deserve!