An increasing number of older Americans are filing for bankruptcy in Virginia and across the country, even as bankruptcies overall appear to be on the decline. While 1.6 million people filed for personal bankruptcy in 2010, that number had reached only 789,000 by 2017, illustrating the changing state of the national economy. Still, the overall numbers may not clearly show some of the demographic differences that exist in bankruptcy trends. By 2016, 12 percent of all bankruptcy filings were made by people over 65, a proportion that rested at only 2 percent in 1991. The bankruptcy rate declined for people under 55, but shot up for those above that age.
There are a number of factors that could contribute to higher likelihoods of personal bankruptcy among older people. Social Security has become less generous and traditional pension plans continue to decline. While Social Security used to generate around 48 percent of a person’s pre-retirement income, that number fell to around 38 percent by 2010. Pensions of the past more commonly provided defined benefits, but current plans are more likely to fluctuate on the basis of investment values. In addition, healthcare costs have risen sharply and medical expenses are often a major contributor to bankruptcy, even for older people with access to Medicare.
Some also say that generational trends could be reflected in the bankruptcy statistics. Baby boomers were also more likely to declare bankruptcy at younger ages, according to statistics from 1991 and 2001. Socioeconomic trends and money management issues for people of this generation may combine to produce higher rates of economic crisis.
People who are facing mounting debts and collection calls may be looking for a solution. A bankruptcy attorney might provide information on how Chapter 7 or Chapter 13 bankruptcy may help people obtain debt relief and make a new start.