Retirement is supposed to be a time when leisure and money are entirely your own, but it seems bankruptcy is a growing problem for those over 65. A recent study by the University of Michigan Law School has found that there are an increasing number of Americans over 65 who are declaring bankruptcy.
Professor John Pottow, a professor at the school has found that people over 65 now make up seven percent of bankruptcy filings. He says they are now the fastest growing demographic. Much of this is blamed on credit cards.
Two-thirds of Americans who filed for bankruptcy said credit cards were the key reason for their financial problems, according to Pottows research. Besides having more credit card debt compared with younger bankruptcy filers, 44.8 percent of those aged 65 and older also had more plastic in their wallets. Theyre using credit cards as a maladaptive coping mechanism, Pottow says.
Stephanie Osterland, a supervisor in the bankruptcy department at GreenPath debt solutions, sees an increasing number of seniors living beyond their means. Says Osterland: Theyre just trying to live off of a fixed income, and thats usually Social Security. Maybe they have a small pension. We find theyve used credit cards to supplement that income and expenses or they just end up getting into a lot of medical debt.
In addition to escalating medical expenses, seniors have seen their portfolios hit hard by the lagging stock market. Carolyn Rodi of Saving Your American Dream says those considering bankruptcy should see a credit counselor at a non-profit organization to get their finances in order.
