Bankruptcy Booms Among Older Americans

A study from the Consumer Bankruptcy Project found the rate of people 65 and older filing for bankruptcy is three times what it was in 1991, with this demographic being the largest filer population, reports the New York Times . Between February 2013 and November 2016, there were 3.6 bankruptcy filers per 1,000 people 65 to 74, compared to 1.2 in 1991. Meanwhile, 12.2 percent of filers are now 65 or older, up from 2.1 percent in 1991. The increase is apparently being driven by a 30-year shift of financial risk from government and employers to individuals. The effects of this change include longer waits for full Social Security benefits, the replacement of employer-provided pensions with 401(k) savings plans, and increasing out-of-pocket healthcare expenses, all of which are worsened by shrinking incomes. "When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give, and older Americans turn to what little is left of the social safety net — bankruptcy court," the study says. University of Idaho Professor Deborah Thorne says filing for bankruptcy is often "too little too late" for older Americans. "By the time they file, their wealth has vanished and they simply do not have enough years to get back on their feet." The study also found the next generation nearing retirement age is filing for bankruptcy in greater numbers, and the average age of filers is climbing as well. "The only explanation that makes any sense are structural shifts," Thorne says.