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Why are more older people facing bankruptcy?

On Behalf of | Nov 3, 2020 | Firm News

Even among people who have planned well and saved for years to fund their retirement, unexpected events may end up eating into their nest eggs, leaving them with virtually nothing at a time when they no longer work and earn an income.

Despite the belief that serious debt and bankruptcies may be experienced mostly by younger people, the fact remains that the rate of bankruptcy among consumers 55 and older has jumped up.

Medical costs a significant driver of bankruptcy filings

As explained by Forbes, a professor at the University of Illinois indicates that up to 60% of bankruptcy filers aged 55 and older sought debt relief via a bankruptcy plan due to excessive out-of-pocket medical costs. Whether due to a lack of health insurance or insufficient insurance coverage, more and more people today seem to be struggling to afford the care they need.

Surge in bankruptcy filings by older consumers

Between 1991 and 2016, the United States has seen a dramatic increase in the percent of bankruptcy filers among those consumers who are at least 55 years old. Among consumers between the ages of 55 and 64, consumer bankruptcy plans rose by 66% in those 25 years. In the same period of time, bankruptcy filings by consumers between the ages of 65 and 74 skyrocketed by more than 200%.

This information is not intended to provide legal advice but is instead meant to give residents in Michigan an understanding of how serious the problem of medical debt can be and how it can be a major contributor to the need to seek relief via a consumer bankruptcy.