Bankruptcy for Elder Americans
By Kurt O'Keefe, Attorney at Law on Aug 6, 2007 in General Bankruptcy Information
Yet another report on the increasing percentage of elderly Americans filing bankruptcy here.
Large uninsured medical costs are frequently given as a reason for Chapter 7 filings among people over age 55.
I see other factors.
Often, helping children, and grandchildren, who frequently have been affected by substance abuse issues. That is, daughter marries alcoholic, not enough money to take care of the family, so the grandparents chip in The source of the money used to help? Unfortunately, the grandparents’ home equity, or credit card cash advances.
Credit card companies, who send cards to college students, whom they know have no income, have had no problem sending cards to retirees with only pension and social security income.
And their income to debt ratio is worse if they have re-financed a paid for home.
The emotional burden of filing is more severe, as older Americans attach more stigma to filing, and, have usually lived relatively debt free most of their lives.
Their generosity with their own family, combined with lax or non-existent lending standards, buries them in a hole they cannot escape.
And the negative consequences do not stop there. Instead of having some accumulated wealth to pass on to their children, they have nothing.
Their children, who, in decades gone by, could have used inherited wealth to buy a bigger house, or for their children’s college education, now have a shortfall that did not exist a generation ago.
So, more student loans, more borrowing by the following generations, and, more bankruptcies.
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