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Bankruptcy and the Elderly
By Mark Markus | June 23, 2008
Bankruptcy and the elderly (senior citizens) is not a new topic, but one that is gaining increasing notoriety as more and more senior citizens need to seek protection and relief with the bankruptcy laws. It may seem odd to seek a “fresh start” in bankruptcy during one’s later years, but it is certainly nothing to ignore or dismiss without analyzing your options.
According to a recent article by Gary Haber of “The News Journal”, Bankruptcy filings among people 55 and older have risen sharply, as older Americans struggle[d] with higher medical bills and stagnant incomes, according to an AARP Study.
Writes Haber: “in 1991, people 55 and over represented just 8.2 percent of bankruptcy filers, according to the analysis by researchers at Harvard Law School, the University of Michigan and Ohio University.
That figure jumped to 22.3 percent by 2007, with the fastest increases among people 75 and older (up 566.7 percent) and those ages 65 to 74 (a 177.8 percent increase), the study found. Filings rose 150.8 percent among those between the ages of 55 and 64.”
According to the article, the combination of fixed incomes and higher bills has pushed many seniors to the brink financially, says Elizabeth Warren, a professor at Harvard Law School and one of the above-referenced study’s authors.
While we don’t want to think about having to file a bankruptcy so late in one’s life, it can often be very effective, with a minimum of hassle to the debtor. For example, unless one intends to acquire many new assets or loans in the future, the effect on one’s credit rating would be essentially meaningless.
Moreover, many elderly people who have social security as their sole source of income, and who have little in the way of assets, may be judgment-proof and not need to file a bankruptcy at all (although even in those cases, the relief from the creditor phone calls can be sufficient reason alone).
It is always important to seek the advice of a qualified bankruptcy attorney to assess your options and find out what is best for your personal situation.
Topics: Elder Bankruptcy Issues |
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