By Lynnette Khalfani-Cox
Elderly Americans struggling under the weight of credit card debt and medical bills are increasingly resorting to bankruptcy in retirement.
A slew of recent data highlights the problem:
A 2010 study from the University of Michigan Law School, called The Rise in Elder Bankruptcy Filings, found that those 65 and older are the fastest-growing segment of the U.S. population seeking bankruptcy protection
The Washington D.C.-based public policy group Demos reports that Americans 65 and above who carry a balance on their credit cards owe an average of $10,235 — up 26% from 2005.
Older debtors who filed for bankruptcy owed a median $22,562 to credit card companies, the Michigan study showed
“The findings are both striking and ominous,” says John Pottow, author of the University of Michigan study. “While multiple factors, such as health problems and medical debts, contribute to elders’ financial distress, the dominant force appears to be overwhelming burdens related to credit cards.”
Pottow’s study found that elder debtors carry 50% more credit card debt than younger debtors, and seniors cite credit card interest and fees as a reason for their bankruptcy filings 50% more frequently.
Unfortunately, the rise in bankruptcy filings among the elderly isn’t merely a recent phenomenon, or a reflection of the Great Recession. Even before the recession hit, seniors were struggling.