Conventional wisdom holds that once you reach your senior years, your hard-earned retirement and savings will kick in to provide for you. However, nowadays, the reality is that more and more seniors are filing for bankruptcy.
Left with little to no savings and a meager income from retirement or Social Security, many senior citizens are simply unable to manage financially in the face of overwhelming debt. If you fall into this category and are feeling helpless and unable to meet your debt commitments and monthly bills, you should know that bankruptcy may be a viable option.
Bankruptcy increasing among seniors
The Consumer Bankruptcy Project conducted a study that revealed bankruptcy filings among people aged 65 and older are increasing. In fact, it showed that the percentage of seniors in the bankruptcy system has increased at a nearly five-fold rate. Many seniors actually have a negative net worth, and the trend is expected to grow. Many of these older Americans are unable to fully retire, and at the same time, are unable to get ahead of their debts.
Credit card debt is overwhelming
One of the major types of debt pushing many seniors into bankruptcy is overwhelming credit card debt. That is because credit is often used as a way to bridge the gap between incoming funds and necessary expenses, thus worsening the overall financial picture for these individuals.
In a Chapter 7 bankruptcy, however, credit card debt is a dischargeable debt. That means it gets wiped away for a fresh financial start. This is because it is a nonsecured debt and, therefore, no collateral insures the debt, as in a mortgage; thus, the creditor is unable to foreclose or repossess an asset. Many seniors have this and other types of nonsecured debt, such as medical bills. Bankruptcy may be a smart choice for you if you are in this situation and are unable to get your head above water financially. Even with secured debt, bankruptcy may be a workable solution. Everything depends on your individual situation.
The important thing if you are facing financial difficulty of this type in the later years of your life is to remember that you do have options. Explore these bankruptcy options to see if you may be a suitable candidate. Bankruptcy can provide a workable and effective solution that can enable you to break free from the financial hardship of overwhelming debt in the face of shrinking or nonexistent income.