No one need tell you that Michigan has seen some hard economic times in recent years. This is particularly true if you are a senior citizen relying on Social Security as your main or only source of income.
The New York Times reports that nationwide, gray bankruptcy, i.e., bankruptcies filed by people aged 65 and older, has skyrocketed in the past 30 years. In fact, the rate has risen from 2.1% in 1991 to 12.2% in 2018.
Five main causes
While virtually everyone has felt the economic squeeze, seniors like you have been especially hard hit due mainly to the following five factors:
- Longer waits to begin receiving Social Security benefits
- The ever-rising cost of health care
- The continuing problem of Medicare coverage gaps
- Higher credit card balances than ever before
- Fewer savings than ever before
The savings crisis
The rate at which Americans have been able to save has radically decreased. Today in households headed by a senior, the median lifetime savings amounts to only $60,000. If your household falls in the bottom quarter of this demographic, your savings account probably totals only $3,000. Should you face an emergency, this amount is not nearly enough to get you through.
The health care cost crisis
Add extraordinarily high health care costs to reduced savings and you have the perfect storm for financial distress among seniors. If Social Security represents your only income, you may find yourself spending up to 41% of your benefits on prescription medications. This may well put you in the predicament of having to choose between buying groceries and buying your meds.
Given all of the above, bankruptcy may indeed become your only viable option for getting out from under your overwhelming debt. This is general educational information and not intended to provide legal advice.
