Elderly Bankruptcy Is On The Rise -- Here's Why

[mfcorey1]

This week, the U.K.’s Financial Times covered an important and overlooked aspect of how the U.S. treats its elders: bankruptcy. Stories of seniors filing for bankruptcy are heartbreaking and uncomfortable, so I am not surprised that it took a correspondent paid by a foreign newspaper (Patti Waldmeir) to tell this American story from the lobbies of our bankruptcy courts.

Like every good story, there are complicated victims and more than one perpetrator. Everyone has a role in the “crime.”

Victims In Elder Bankruptcies

Bankruptcy in the United States has undergone a rapid “graying” over the past few decades. In 1991, elders made up 2% of the bankruptcy relief claims; now the share is 12%. Those stark numbers come from a recent Indiana Legal Studies research paper, “Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society,” cowritten by professors Deborah Thorne of the University of Idaho, Pamela Foohey of Indiana University Bloomington, Robert M. Lawless of the University of Illinois, and Katherine M. Porter of the University of California, Irvine.

https://www.forbes.com/sites/teresaghilarducci/2019/08/15/elderly-bankruptcy-why/#1d65a47e4f51

[DBoon]

1. I like this quote

America has embarked on a 40-year economic experiment of do-it-yourself pensions, the breaking of unions, real wage stagnation, the common practice of discarding workers in their 50s, and cutting Social Security benefits by raising the retirement age. The effects of that experiment are now coming home to roost in bankruptcy courts across the nation and, more broadly, in the form of personal misery among aging boomers.

[rampartc]

2. you must pass a means test to receive medicaid

most people need Medicaid to pay for nursing home ("long term care&quot

so we have to "spend down" all savings and assign all income. bankruptcy is a common result.

it is just a fact of life. none of us is getting younger.

[Sherman A1]

3. Worth the read

A very sad commentary on where we are at and how we got here.

[dixiegrrrrl]

4. I read the other day about the increase in suicides among the elderly.

Medical bills being a large reason.

If we don't get some serious changes to the system, I expect that Soc. Sec. checks will soon allow for garnishment by bill collectors.

[stopbush]

5. Let's not forget that SS benefits were not taxed until Ronald Reagan decided

that taxing seniors living from check to check was a good offset for his tax cuts to the wealthy.

[dixiegrrrrl]

6. Damn...I had forgotten he was the one.

The good news is that the tax rate doesn't apply, after deductions, to those of us who have small enough checks.
Us Boomers are gonna be the last of that program, I fear.

[progree]

7. Hmmm. 85% of my Social Security check of $1683/mo is taxed

Actually it's $1638/mo from which Medicare Part B $135.50 premium is deducted leaving a net of $1548/mo.