If you are a Virginia senior citizen whose income consists mainly of Social Security, you know how difficult it is to stretch your money far enough to cover all of your monthly bills. In fact, you may be facing financial difficulties severe enough that you have begun to contemplate filing bankruptcy.
Per the New York Times, the rise in bankruptcy filings by people 65 years of age and above has gotten to the point where the phenomenon now goes by the name of gray bankruptcy. In comparison to the 2.1% of people in your age category who filed bankruptcy in 1991, today that percentage has risen to 12.2%.
Gray bankruptcy causes
Five main factors account for this dramatic rise in the number of bankruptcies filed by older Americans as follows:
- You must wait longer for your Social Security benefits than previous generations.
- You face far more exorbitant health care costs than previous generations.
- You also face more Medicare coverage gaps.
- You likely have far larger balances on your credit cards than previous generations.
- You likely have far less savings than previous generations.
The rate at which Americans save has dramatically decreased over the past several decades. Today’s senior-headed household possesses a median lifetime savings of $60,000. If you fall within the bottom 25% of this age demographic, your lifetime savings likely amount to a mere $3,000, far too little to cover you in an emergency.
Health care costs
The main reason why seniors like you face such a difficult time is that health care costs have skyrocketed in recent years. In fact, if you find yourself having to choose between buying groceries and buying the prescription medications you need, you are not alone. If you live on Social Security, your healthcare costs may well exceed 41% of your Social Security income.
Should you become forced to file bankruptcy, know that there is no shame in doing so. Unfortunately, bankruptcy represents one of the few remaining safety net choices available to older Americans.
This is general educational information and not intended to provide legal advice.