Wealth inequality is blamed for many of the social ills in Virginia and around the country, and a report from the Consumer Bankruptcy Project suggests that it may also be behind a recent surge in bankruptcy filings among older Americans. Bankruptcy petitions filed by individuals 75 years of age or older have more than tripled since 1991, and filings made by people between the ages of 65 and 74 more than doubled during the same period according to the report.
Most experts expect this trend to continue in the years and decades ahead as the number of Americans over the age of 65 is predicted to climb to 88 million by 2050. Another recent study makes for equally grim reading. According to researchers from the Urban Institute, American retirees in the bottom income bracket can expect to see their lifetime earnings to fall by 13 percent by 2085. The CBP study was published online by the Social Science Research Network on Aug. 5.
Medical costs have soared in recent years, and 62 percent of the senior citizens polled by the CBP said that they had filed for bankruptcy partly because of unpaid doctor or hospital bills. Four out of 10 of the respondents told the researchers that the income they lost while out of work due to illness or injury was the primary reason they sought debt relief.
Deciding to file a bankruptcy can be difficult for people who have worked hard their entire lives and are embarrassed to find themselves in unmanageable financial situations. Attorneys with debt relief experience could explain that the nation’s bankruptcy laws were written to provide second chances for just this type of individual. They could also mention that filing a personal bankruptcy petition generates an automatic stay that stops creditor harassment.