One of the most vulnerable groups in society when it comes to filing for bankruptcy is senior citizens. This group is increasingly filing for bankruptcy due to a variety of factors, including mounting credit card debt, high medical expenses, and insufficient savings and retirement funds.
Senior citizens facing these debilitating debts and expenses must make a choice about how to overcome their financial struggles. Often without employment to help aid their income, they have few options. However, bankruptcy is a viable choice for many of these people.
Senior citizens and bankruptcy filings
A recent study revealed that since 1991, bankruptcy filings among people age 65 and older have increased threefold. The study suggests that one of the main reasons for this is due to the fact that the government and employers have increasingly shifted responsibility for financial well-being to individuals. That means senior citizens are now facing a range of financial responsibilities that once were covered by social “safety nets” that no longer exist or exist only in part compared to decades ago.
Options for bankruptcy
Although many people view bankruptcy through a negative lens, the truth is that this option can be one of the most effective choices for a senior citizen facing overwhelming medical debt, credit card debt or other financial hardships without recourse. Two types of bankruptcy are available to individuals: Chapter 13 and Chapter 7. Each type has different requirements, and the one a person chooses depends on her or his individual situation.
In a Chapter 7 bankruptcy, the individual does not have to file a repayment plan, as with Chapter 13. Chapter 7 discharges unsecured debt such as credit card debt. A Chapter 13 bankruptcy is suitable when a person has the ability to repay through debt reorganization. In Chapter 13, an individual can save his or her home from foreclosure because the repayment plan gives the individual an opportunity to catch up on missed mortgage payments.
If you are a senior citizen facing unmanageable debt, you should not ignore your situation, nor should you feel shame about it. The important thing is to know that you have options and that you can take proactive steps to begin building a stronger financial future.