Florida Seniors and Bankruptcy: Asking for Help Doesn’t Mean Losing Everything
Florida Seniors and Bankruptcy
As Floridians live longer and baby boomers reach retirement, many are finding that the lifestyle they’ve become accustomed to may be unsustainable during retirement and they may actually need bankruptcy relief to make ends meet.
Many retirees and those approaching retirement are finding that Social Security and Medicare benefits are not sufficient to cover everyday living expenses. While previous generations may have entered retirement with assets such as savings and fully-paid-for homes, today’s retirees often have significant debt-from credit card bills to mortgages to medical expenses.
It’s hard to imagine the stress of overwhelming financial burdens while looking toward the golden years, however studies show that the number of seniors in America seeking bankruptcy relief is consistently increasing. The Institute for Financial Literacy reports that for the 2009 (the most recent year for which figures are available), bankruptcy filings by those age 65 and over are up 7.8 percent over the figure from just three years prior.
There are many reasons why senior citizens seek out bankruptcy relief, including:
- Credit card debt. Seniors may have entered retirement with credit card debt or accumulated it while finding ways to pay for new expenses like prescription medication and doctor visits. A study by the University of Michigan found two-thirds of those over 65 cited credit card debt as the reason for filing bankruptcy.
- Medical costs. The increasing costs of health care generally as well as prescriptions are burdening retirees throughout Florida. Many retirees take several prescription medications, further straining a tight budget.
- Stock market. Those who had retirement accounts in the stock market have seen massive declines in the total value of their retirement funds.
- Lower incomes. Retirees typically aren’t working a full-time job; if they are working it’s often for less hours and less pay and often they struggle to find jobs because of their age.
- Home values. As property values decline, an asset that was once an investment is no longer a source of additional income when needed; retirees may find themselves with little to no equity in a home.
Many seniors may try to avoid bankruptcy through a variety of methods: reverse mortgages, refinancing debt, shifting debts from one credit card to another, et cetera. But, all too often these attempts to “plug the holes” left by insufficient income are themselves insufficient.
Bankruptcy Options for Florida Seniors
Personal bankruptcy generally takes one of two forms, Chapter 7 (debt elimination) or Chapter 13 (debt repayment plans). Both offer an opportunity to get out from underneath overwhelming debt, while at the same time protecting the sources of income that seniors currently rely on, including retirement accounts and Social Security payments. An experienced Florida bankruptcy attorney can help you understand what your options are based on your specific financial situation.