Why are seniors and Baby Boomers filing bankruptcy in record numbers? The Pittsburgh Post Gazette reported that the two largest increases in bankruptcy filings are seniors and Baby Boomers:
1. From 1991 to 2007 bankruptcy filings for people over 65 increased 150%
2. During the same period bankruptcy filings for people 75 to 84 years old increased 433%
Bankruptcy abuse reform was supposed to stop this, wasn’t it? Why is this happening? I can offer a few answers looking at the people who come to me to file bankruptcy.
1. Aging Americans are forced to rely more and more on credit cards, payday loans and other forms of debt to make ends meet.
2. Baby boomers are just beginning to retire. They are completely unprepared to take this step financially. They do not have enough money. The 401k if ever funded has been depleted to pay credit card bills, medical bills, and living expenses over the years.
3. For many boomers and seniors alike social security is their only retirement income.
4. If you are 50 years old or more jobs are very difficult to get.
5. Financial people always said your home is you biggest asset. Appraise it lately? Have any equity? Doubt it. If you do how can you get to it? Refinancing is a thing of the past especially if you are not working. Sell it? To whom? Where will they get the money to buy it?
6. If you have investments are they in cash? See the bank interest rates lately? Forget capital appreciation. Just hope not to lose anymore.
7. All retirees are carrying some form of debt from their working years. It becomes harder and harder to pay as retirement funds diminish. The retirement planning of years past never took into consideration you would have debt let alone one or more mortgages on your home. All that was to be paid years before retirement.
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