In this time of economic uncertainty, it’s no surprise that bankruptcies are on the rise. What you may not realize, however, is that a bankruptcy trend started almost 30 years ago, long before the advent of today’s situation. It goes by the name of “gray bankruptcy” and refers to the ever-increasing number of bankruptcies filed by people age 65 and older.
Gray Bankruptcy Statistics
If you fit within this demographic category, no one needs to tell you how difficult it is to make ends meet nowadays. You may even have begun thinking about bankruptcy to give you the debt relief you so desperately need. You are not alone. In 1991, senior citizens filed only 2.1% of all bankruptcies nationwide. Today that percentage has increased to 12.2%. Any bankruptcy attorney Battle Creek MI you consult likely will tell you that this gray bankruptcy phenomenon is not likely to disappear any time soon.
Gray Bankruptcy Causes
Bankruptcy statisticians attribute the rise in gray bankruptcy to the following five causes:
- You likely have to wait longer than previous generations to begin receiving Social Security benefits.
- Your health care costs continue to increase.
- You experience more health care insurance coverage gaps.
- You likely have been forced to pay bills via credit cards.
- You likely have little or no savings.
Health Care Crisis
If Social Security represents your only income, you may find yourself spending 40% or more of your monthly check on prescription meds. Worse yet, you may have reached the point where you must choose between refilling your prescriptions and buying groceries.
Studies show that senior-headed households have a median lifetime savings of only $60,000. If your household falls within the bottom quarter of this demographic, you likely have $3,000 or less in savings. And as surely as night follows day, credit card crises follow savings crises. Once you begin living off your credit cards, your downward spiral begins. Bankruptcy may eventually become your only viable option.