Most people don't plan their retirement with a Chapter 7 bankruptcy in mind.
However, Los Angeles Bankruptcy Lawyer Vincent Howard knows that it's a growing phenomenon, as many are coping with exorbitant medical bills and underwater homes on fixed incomes and a growing reliance on credit.
Those Social Security benefits only go so far, and the dreams of living out your golden years debt free are becoming an impossible goal.
Because they come from a generation that places great value on personal integrity and pride, many are reluctant to seek bankruptcy help - even when they're dipping into their retirement funds and life savings.
However, bankruptcy no longer carries the stigma it once did, particularly given today's current economic climate. Plus, it can provide options in many cases for you to remain in your home and hang onto your retirement funds.
A recent study by the Employee Benefit Research Institute showed that between 1992 and 2007, the percentage of homes with people in their mid-50s and older who had debt went from about 54 percent to about 63 percent. It was particularly bad for those between the ages of 55 to 64, about 82 percent of whom had debt.
That's not to say 82 percent aren't keeping their heads above water, but many are merely treading water.
What the study additionally found was that between those years, the overall amount of that debt more than doubled - to an average of $70,370. That's a lot for someone who may get just a few hundred dollars in Social Security payments, plus whatever little savings they've managed to scrape together over the years.
In a lot of cases, medical bills are to blame. Some elderly clients talk of caring for their sick spouses, who may have been ill for years. Even when your loved one passes, their debt does not.
Plus, eligibility for Medicare doesn't start until age 65. Even then, it's not going to cover things like dental care, hearing aids or long-term nursing care.
To help defray those costs, many retirees take on credit card debt. Demos, a New York public policy institute, recently released survey results showing that the average amount of credit card debt for Americans older than 65 has jumped from about $8,000 in 2005 to more than $10,200 three years later.
Then you factor in that many older folks had banked on what had always been a safety net for the elderly and retirees: their homes. They are no longer worth what they once were .
And on top of all that, you have student loans. Now, many of these individuals have long since graduated college, but their children have become saddled with debt, which they often help to pay for. In fact, Americans over the age of 50 reportedly account for 17 percent of the country's $870 billion outstanding student loan balance.
So all of this, in a sense, has created the so-called perfect storm of debt that has left many seniors struggling to catch up.
The good news is: We can help.
Los Angeles Bankruptcy Attorney Vincent Howard at Howard Law can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.
Seniors grow old under debt, By Hanah Cho, The Baltimore Sun