An alarming number of the elderly are sinking into debt after spending down their retirement funds helping financially-struggling children, statistics show. A CBS report reveals credit card debt for seniors has increased 90% in the last ten years. Many debt-ridden elderly people make every effort to make payments on their debts, often scrimping on food and even medicine, in order to “live up to their obligations”.
As a bankruptcy attorney in Indiana these many years, I know there are many factors that lead people to file bankruptcy. The reasons for the increase in debt among the elderly are as varied as with people in general, with the added challenges many seniors have living on a fixed income amidst sharply increasing gasoline, fuel, and medical costs.
On top of all these factors, a new “senior” theme is starting to emerge. Parents, grandparents, and sometimes even great-grandparents are using up their savings, borrowing against the equity in their homes, and then going into credit card debt to help children and grandchildren cope. Sometimes a serious illness strikes a son or daughter or a grandchild, and the parents do all in their power to help out in the crisis. Dad and Mom don’t always feel they can ask for the money to be repaid, especially in this time of job layoffs. Often following a divorce, children return home to live with their elderly parents, and those children don’t have the financial means to pay their parents for the extra food and household maintenance costs.
I see such an irony here! The elderly are often in the best position to obtain relief through the safety net our state has provided when circumstances drive people into debt beyond their control. Frequently, the income and remaining assets of the elderly is protected from creditors under bankruptcy law. However, the elderly are the most reluctant to discuss their finances with any outside party and to face the fact that paying off their debt out of retirement income is just not possible without help.
Bankruptcy is being used by seniors, no doubt. In fact, bankruptcy rates have increased faster among seniors than among any other group in the U.S.. ButI would like to see people start earlier in the game to get professional advice about handling their debt problems.
You’ve got to admire parents in their sixties, seventies, and even eighties, who are sacrificing the security of own golden years for the sake of the younger generation. But when it gets to the point of skipping meals and medications – it may be time to reach for the support and help our state of Indiana provides through the bankruptcy courts.