It seems that, as we age, our bodies simply can't keep up the way they did in our younger years. Seniors in Massachusetts and across the nation may find that they are increasingly racking up medical bills all while living on a fixed income. This can put them in a very precarious financial situation. While some may find that they just need to "tighten their belts" for a little while, others may find that their medical expenses are more than they could ever afford.
In fact, according to one report, medical debt is the number one reason that individuals ages 65 and up file for bankruptcy. This makes up approximately eight percent of those who file for bankruptcy -- a one percent uptick from 2008. And, for some, bankruptcy is a godsend. It is the answer they need to address their debts in a responsible way.
Why are older Americans turning to bankruptcy? There may be a number of reasons. One is that people in that demographic were hard-hit by the "Great Recession" of 2008. Also, if a person can't pay their bills and goes into default, it is possible that as much as 25 percent of their net income could be garnished. Many seniors live on fixed incomes, with no viable means of making up that 25 percent. This makes filing for bankruptcy a sensible option for some.
This may especially be the case when a person is being hounded by debt collectors. In fact, the federal Consumer Financial Protection Bureau has stated that, for those over age 62, the highest number of calls to the Bureau were regarding debt collectors. Filing for bankruptcy can mean more than just debt relief -- it can ease the emotional anguish that comes with the stress of not being able to pay one's bills. Filing for bankruptcy may have a stigma, but that stigma is unwarranted. Sometimes it is the best way for consumers to address their debts in a responsible manner, so they can move forward on a clean slate no matter what their age.
Source: Forbes, "The Reasons More Older Americans Are Filing For Bankruptcy," Tami Kamin Meyer, Nov. 16, 2017