Aging often comes with several health, medical and mental issues, but older adults often face financial hardship, too. In recent years, more older adults filed for bankruptcy to cope with their mounting money struggles.
MarketWatch explores the reason behind the tide of bankruptcy filings. Determine whether your or an older loved one’s current financial state could lead to bankruptcy.
Older people often experience several health problems that require professional care, such as hearing, dental and eye issues. Medical complications often come with substantial costs, which can drain a person’s insurance, personal savings and any other payment methods in place. Federal programs such as Medicaid and Medicare help, but they either do not cover all medical costs or have strict financial and asset restrictions in place that may disqualify a person from applying. Additionally, copays, deductibles and coinsurance can further strain one’s finances.
The cost of living can prove a slippery slope to bankruptcy. Some older adults may wait too late before requesting help to pay their bills. When they do finally ask for assistance, they are often deep in credit card debt from trying to keep up with their mortgage or health care costs.
Credit card debt
Relatedly, many older adults with credit card debt experience difficulty with reducing their credit card principal. They may not have the finances to pay more than the minimum monthly amount on their cards, which increases their overall interest amount. To keep their heads above water and get creditors off their backs, older debtors may have no choice but to file for bankruptcy.