The American Bankruptcy Institute’s ABI Journal recently released a study that says that 42 percent of all debtors filing for bankruptcy were between the ages of 45 and 64 in 2007 and that older Americans file for bankruptcy at a faster rate than young adults. The increased rate of bankruptcy filings among older Americans is due to a combination of unemployment, medical debt, high credit card debt, devalued homes and the decimation of retirement funds.
Not to mention the amount of discrimination many older Americans face in the employment market making it difficult for them to reenter the workforce after suffering devastating financial blows. Many older Americans are losing their jobs and losing their health insurance which can make them vulnerable to the financial fallout of medical emergencies.
Medical debts pile up and they file bankruptcy. But before an older debtor files bankruptcy because of unemployment or medical debt , they often drain their home of equity or raid their retirement account in an attempt to repay debtors and avoid bankruptcy. What they don’t’ understand is that by doing this they are often digging themselves deeper into a debt hole that only bankruptcy can dig them out of.
And like a line of tipped over dominos older debtors with equity lines of credit struggle to repay their debts and succumb to foreclosure , rely on credit cards and eventually face creditor lawsuits after months of avoidance and using one source of debt to pay another. It is at this point that older debtors finally file for bankruptcy. And it is at this point in their financial crisis that bankruptcy is the save haven they so badly need.