Bankruptcy occurs when the “legal status of a person or other entity cannot repay debts to creditors.” In the U.S., filing for bankruptcy is usually a last resort for people after they have failed to pay off their debts. However, a recent study by the Social Science Research Network highlights a trend of bankruptcy increasing among older Americans. According to the study, the bankruptcy rate for senior citizens increased by 200 percent from 1991 to 2016.
Why Are Senior Citizens Filing for Bankruptcy?
Lower incomes, unaffordable health care costs and a national drop in pension fees contributed to this new trend. Although Medicare provides great coverage for senior health care, it is unable to cover everything. Medicare may not cover dental care, hearing aids, eye exams and other procedures.
Medicare often requires copays, coinsurance, and other deductibles that can prove to be difficult to afford. Forty-one percent of the average Social Security income in 2013 consisted of out-of-pocket health costs for elderly people using Medicare. Recurring health issues can cause many older adults to lose their jobs as well, which will further complicate matters.
If you are a New Jersey resident interested in filing for bankruptcy, don’t hesitate to call an experienced bankruptcy lawyer at Garland & Mason, LLC today for your free case evaluation and more information on the New Jersey bankruptcy process.