Most of us think of our golden years, the years when we age into retirement, as a time of life that is defined by freedom from work, time constraints and financial obligations. The reality is far different, though. In fact, a recent study conducted by the Consumer Bankruptcy Project found that since 1991 the number of individuals age 65 and older has tripled.
What has caused this staggering increase? A number of factors. To start, many Baby Boomers are being hit with increased medical care costs that are significantly eating into their savings. Also, incomes have dwindled over the years and pensions have been replaced by riskier 401(k) plans. The average income for those elderly individuals who seek bankruptcy is just over $17,000. With such a small income it is easy to see how an expensive medical bill or an ongoing mortgage payment can eat into one’s finances, making it difficult to get by.
The sad news is that, although bankruptcy can provide relief to these elderly individuals, it often comes too late to provide them with the full benefits offered by bankruptcy protection. If these individuals had acted more quickly in seeking personal bankruptcy protection, they may have been able to protect many of their assets from creditors while at the same time discharging debt. This, in turn, could have allowed them to retain the finances they need to live a comfortable retirement.
Although the bankruptcy processes, both Chapter 7 and Chapter 13, remain constant, the people who seek them out are unique in their circumstances. For this reason, those facing financial hardship at any point in life need to think about how best to protect themselves and their finances while at the same time secure a fresh financial start. Competent and experienced legal professionals, including those at our firm, stand ready to assist these individuals in this endeavor.