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Bankruptcy Law Blog

Thursday, September 13, 2018

Senior Citizens are Increasingly at Risk for Bankruptcy

This month, a new study found that the number of senior citizens who have filed for bankruptcy has tripled since 1991. This is a shocking statistic for many reasons, not the least of which is that senior citizens are one of the more vulnerable populations in our country in terms of health and earnings potential. What is driving this incredible rise in senior citizen bankruptcy, and how can you tell if your loved ones are at risk?

Why the Increase?

The study found that the combination of increasing medical expenses and decreasing income is driving most of the increase. Many senior citizens took a significant financial hit during the great recession that they never fully recovered from. While other age demographics may be able to go back to work to make up the loss, because of their age and often due to health issues this is not an option many senior citizens have.

Additionally, the same health problems which prevent them from getting back into the workforce are depleting their financial reserves. The study found that many senior citizens are draining their 401(k) and other retirement accounts to pay their medical bills, leaving them with little left over to cover basic needs like food, mortgage, and rent payments.

What About Social Security?

Unfortunately, Social Security simply does not stretch as far as it used to for most senior citizens. The study found that the shift in Social Security towards a defined contribution system that places more of the financial risk upon senior citizens is another leading contributor to the rise in senior citizen bankruptcy filings. While many senior citizens—and Americans of all ages—continue to think Social Security is a guaranteed safety net for old age, with each passing year that becomes less true.

How Can I Tell if My Loved One is at Risk for Bankruptcy?

The idea of our elderly loved ones having to choose between their health and their retirement is a gut-wrenching one. While many people find financial conversations to be very uncomfortable, it is important that you take time to checked in with the senior citizens in your family to see if there are any hidden financial concerns that could be putting them at risk. Many people, especially the elderly, are ashamed to admit they are going through financial trouble. Additionally, many elderly individuals do not want “to be a burden” on their families so will not reach out if they do need help until it is too late.

When you have this conversation with them, it is important you tell them at the start of that you want them to live the rest of their lives free of financial worries, and that you love them no matter what financial troubles they may be facing. Ask them about whether they have made any withdrawals from their retirement accounts to cover their needs, and whether they are having any trouble making payments on medical bills or other debts.

Know an Elderly Person Who Needs to File for Bankruptcy?

If you are or know an elderly person in Alabama who needs to file for bankruptcy, the experienced, professional, and compassionate Alabama bankruptcy attorneys at Padgett & Robertson can help. Contact our office today to discuss your options.


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”