More Georgia Seniors Filing for Bankruptcy
Most of us envision our retirement years as something of an adventure – a time to travel, take up hobbies, and enjoy our stress-free golden years with friends and family. Yet according to a new study, today’s seniors may not have the financial resources to fulfill those dreams. The elderly population is filing for Chapter 7 and Chapter 13 bankruptcy in record numbers, and credit card debt is often the culprit.
In 2007, seven percent of bankruptcies were filed by someone 65 or older, which is a dramatic increase from 1991, when just two percent of filers were over retirement age, according to a study by University of Michigan Law Professor John Pottow. Additionally, the median age of bankruptcy filers has risen steadily, from 36.5 in 1991 to 43 in 2007.
The study cites increased levels of credit card debt as the main reason for the rise in elderly bankruptcy filings. While younger debtors have a median credit card debt of $15,000, debtors over 65 have a median of $27,000, according to the Consumer Bankruptcy Project. In addition, older debtors are more likely to have five or more credit cards than their younger counterparts.
Pottow says that credit card debt has risen among the elderly population for several reasons. While 60 percent of younger debtors asked creditors to work with them before resorting to bankruptcy, only 38 percent of the elderly did so, indicating that they are less willing or able to deal with credit card companies.
Another possible reason for increased credit card usage, Pottow says, is that younger people are more likely ask for help when they get into trouble. 68 percent of younger debtors had asked for financial assistance, compared to just 35 percent of the elderly. Pottow found that pride was a major reason for this disparity, relaying one interviewee’s answer. “You don’t have to have an awful conversation with your kids about your financial problems,” the response said. “You just fill out that thing that came in the mail and you don’t have to tell the kids.”
Source: Forbes, “Credit Card Debt Blamed for Surge in Elder Bankruptcy“, Janet Novack, 12 October 2010