Senior citizens with debt are more likely to file for bankruptcy now than it was the case in the last decade. The claim is corroborated by a large number of bankruptcy law experts like Chang & Diamond, APC, who cite various reasons for this trend. There’s also a huge debate on whether this is a natural step in this day and age or a big problem.
People don’t usually associate bankruptcy with a fresh start, especially at a later age when you have a limited time to repair your credit score.
In this article, we’ll examine this trend, the pros, and the cons as well as reasons why seniors are filing for bankruptcy.
More and More Cases of Senior Bankruptcy
First, we have to establish that there are various definitions of what constitutes a senior citizen or at what age does one become a senior citizen. Even so, the fact that there is an increase of senior bankruptcy filings is undisputable. Usually, this refers to people older than 55 who are struggling with various financial issues such as decreased income and medical bills.
Just to get a clearer picture, people over 55 made up for 8.2% of all bankruptcy filings in 1991. This number has increased to 22.3% by 2007. The largest percent was people aged over 75, with age groups between 64 to 74 closely following.
The combination of a decreased income and bigger expenses is what motivates senior citizens to file for bankruptcy as they walk on this thin financial line.
When to File for Bankruptcy
Most seniors only file for bankruptcy after they have burnt through all their pension and retirement funds and are trying to repay their medical or other debts. However, the right time for seniors to consider for bankruptcy is earlier, while they still have some funds in their savings.
Filing for bankruptcy is always better done earlier than later. Many citizens are judgment-proof, so they don’t always have to file for bankruptcy at all. Still, if it is something you consider, you should weigh the options sooner, not later.
Senior Bankruptcy Has Very Few Cons
Maybe it’s sad for you to think about a senior citizen having to file for bankruptcy at such a vulnerable age, it is in fact usually the best way for seniors to solve their financial issues. In fact, filing for bankruptcy at a later age actually has more pros than cons.
For example, senior citizens are less likely to pursue new assets or get new loans at that age. Therefore, the impact filing for bankruptcy has on their credit score is not that meaningful as it would be for a young couple planning to buy a home.
In most cases, senior citizens’ only source of income is social security. People with very little assets may be considered judgment-proof, meaning they won’t even have to file for bankruptcy to begin with. Still, some seniors choose to file for bankruptcy just to get rid of harassing creditors.
If you have an elderly parent in a tight financial spot, consider talking to them about filing for bankruptcy. This is usually the best option not just for them, but their offspring as well. If you haven’t, it might be a good time to discuss filing for bankruptcy with them.
Chang & Diamond APC. bankrupcy attorneys are bankrupcty law experts based in San Diego, California. If you need a reliable attorney to guide you through the bankruptcy process you can reach out to them at 9089 Clairemont Mesa Blvd #110, San Diego, CA 92123 or 800 718-8118.