Bankruptcy is easily one of the worst fears anyone has to deal with. Even worse, being bankrupt and old without anyone to cater for you is dreadful. This is, unfortunately, the case for many Americans. According to research, the rate of older adults (above 55 years) who have become bankrupt has skyrocketed up to 66% since 1991. Basically, older adults of above 65 years make a total of 12% of bankruptcy filers. Also, what’s astonishing is that older adults within this age group, spend most of their income offsetting accumulated debts.
Why Are More Older Adults Filing for Bankruptcy?
A lot of people tend to have this belief that as you get older, especially after putting your kids through school, you should be debt free. Contrarily, you can pile up more debts as you age. For older adults above 55 years, here are some reasons why they have a lot of debt:
Medical Expenses – an inevitable part of getting old is falling ill. Although there are some simple ailments that do not require older adults to break their bank, others are different. Life threatening diseases like ALS, Parkinson’s, and dementia can be expensive to manage over time. Most of these illnesses require hiring professional help to assist with everyday activities, which can be expensive.
Cost of House Maintenance
A lot of older adults tend to hold on to their family home, because of sentimental value. However, this isn’t wise, as the maintenance cost can bring them to debt fast. For retirees, moving into a smaller home or a cheaper state is much better for their finances. Additionally, the mortgage payments can leave a dent in their bank accounts.
They Run Out of Resources
Another reason why older adults file bankruptcy, is that they run out of money. Basically, most of the older adult population does not work full time anymore and they have to rely on their savings. However, with medical bills and mortgage piling up, they could end up having nothing left. Thus, they end up being flat broke.
What’s the Next Step After Bankruptcy?
Fortunately, filing for bankruptcy isn’t the end of the world. You can still build a credit score after bankruptcy.
Apply for A Secured Credit Card
The best way to make a comeback from bankruptcy is by trying the secured credit card. Basically, your credit limit for this card is created based on the deposit you’re required to make up front. For example, if your initial payment is $200, that would be your credit limit. This works in your advantage, because you can only make small purchases and you need to pay them in full each month. So, with a great payment history for at least a year, you can build a good credit score and move to an unsecured credit card.
If you are approaching your golden years and you are worried that your financial burdens will ruin them, you need the assistance of a licensed attorney and counselor. Elias Dsouza of Dsouza Legal has the skills and experience you need to get control of your financial future.