An increasing number of older people in Texas and across the country are filing for bankruptcy. There are a number of factors contributing to the problem of people facing severe economic crisis after they reach retirement age. While in 1991, only 2% of all bankruptcy claims were made by elders, that figure has now reached 12%. Personal bankruptcy can provide relief from most types of debt, but it does exclude some major obligations, including student loans and certain taxes. In many cases, elders may accumulate student loan debt as co-signers for younger relatives.
Most older people who seek debt relief through personal bankruptcy have lower incomes. Many point to social changes as major factors in the rise in elder bankruptcies. For example, wages have stagnated, pension plans have been eroded and trade unions have been weakened. Many companies have ended their pension plans or switched to 401(k) plans that rely mainly on employee savings. This is particularly challenging for people with low incomes.
Medical debt is another major factor to keep in mind. Medicare is paying for a smaller share of elderly people's health care, and they may have greater personal bills as a result. Many people may rely on credit cards, and if they face other financial problems, they may find it difficult or impossible to pay off their mounting debt.
Some elderly people may also be more likely to fall victim to scams, predatory loans or other deceptive practices that leave them in a poor financial situation. People who are seeking debt relief for any reason can consult with a bankruptcy attorney about their options for the future.