Wednesday, June 16, 2004
Bankruptcy and aging
[Timothy L. Takacs, "Bankruptcy Rising Among Elderly Americans," Elder Law FAX, 17 May 2004.]
Implications for Medicaid and other welfare programs abound in a recent study that shows a growing trend toward poverty among America's elderly. One key factor in debt levels was whether families had health insurance:
Although older Americans account for a small proportion of total personal bankruptcy filings, they are the fastest-growing group in bankruptcy. About 82,000 Americans 65 or older filed for bankruptcy in 2001, up 244% from 1991, according to the Consumer Bankruptcy Project, a study done at Harvard.
The United States Department of Justice, which runs the federal bankruptcy trustee program, released a study that painted a grim picture of the future for many older Americans.
According to the report, the average gross monthly income of an elderly debtor, $1544, is more than one-third below the average for Chapter 7 debtors ($2354). And for the average elderly debtor, Social Security benefits are the main source of income.
"Although the elderly are less likely to file chapter 7 bankruptcy than younger people, a significant number of them do file each year. The number of elderly filers is likely to grow in the coming years," the Justice Department report concludes.
The Justice Department found that most elderly debtors have very high concentrations of credit card debt -- not, as one might expect, high medical expenses.
A recent report from Demos, a New York-based public policy research group, found an alarming increase in credit card debt among older Americans.
"Conventional wisdom suggests that this segment of the population -- with lifetimes of financial experience, an over 80% homeownership rate and a generational ethos of thrift -- would be immune to the record debt increases of the 1990s," the report notes.
The Demos report, "Retiring in the Red," found that self-reported credit card debt among seniors age 65 and over increased 89% to $4041, between 1992 and 2001.
Among the report's other key findings:
* Having medical insurance -- or not having it -- made a major difference in credit card debt. Families in the 55 to 64 age range, for instance, had seen a credit card debt increase of 169% if they had no health insurance, but only 37% if they had health insurance.
[Timothy L. Takacs, "Bankruptcy Rising Among Elderly Americans," Elder Law FAX, 17 May 2004.]
Implications for Medicaid and other welfare programs abound in a recent study that shows a growing trend toward poverty among America's elderly. One key factor in debt levels was whether families had health insurance:
Although older Americans account for a small proportion of total personal bankruptcy filings, they are the fastest-growing group in bankruptcy. About 82,000 Americans 65 or older filed for bankruptcy in 2001, up 244% from 1991, according to the Consumer Bankruptcy Project, a study done at Harvard.
The United States Department of Justice, which runs the federal bankruptcy trustee program, released a study that painted a grim picture of the future for many older Americans.
According to the report, the average gross monthly income of an elderly debtor, $1544, is more than one-third below the average for Chapter 7 debtors ($2354). And for the average elderly debtor, Social Security benefits are the main source of income.
"Although the elderly are less likely to file chapter 7 bankruptcy than younger people, a significant number of them do file each year. The number of elderly filers is likely to grow in the coming years," the Justice Department report concludes.
The Justice Department found that most elderly debtors have very high concentrations of credit card debt -- not, as one might expect, high medical expenses.
A recent report from Demos, a New York-based public policy research group, found an alarming increase in credit card debt among older Americans.
"Conventional wisdom suggests that this segment of the population -- with lifetimes of financial experience, an over 80% homeownership rate and a generational ethos of thrift -- would be immune to the record debt increases of the 1990s," the report notes.
The Demos report, "Retiring in the Red," found that self-reported credit card debt among seniors age 65 and over increased 89% to $4041, between 1992 and 2001.
Among the report's other key findings:
* Having medical insurance -- or not having it -- made a major difference in credit card debt. Families in the 55 to 64 age range, for instance, had seen a credit card debt increase of 169% if they had no health insurance, but only 37% if they had health insurance.
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