Bankruptcy Filings for 55+ See a Significant Increase
The rate at which Americans age 55+ are filing bankruptcy has significantly increased over the last few decades.
Bankruptcies Surge Among Older Americans:
Since the early 1990s, the number of Americans over the age of 55 filing bankruptcy has tripled. America’s older generation is more likely than ever to seek protection from creditors through bankruptcy. According to a study written by academics from various institutions, including the University of Illinois and the University of Idaho (“Graying of US Bankruptcy: Fallout from Life in a Risk Society,”) when considering the pool of bankruptcy petitioners, the percentage of older Americans is at its highest point in history.
Statistics Academics Point to When Outlining Growth of Gray Bankruptcy:
- Between 2013 and 2016, the average rate at which 65 to 74-year-old Americans filed bankruptcy increased to 3.6 out of every 1,000 individuals (compared to 1.2 per 1,000 in 1991).*
- 12.2% of those who file bankruptcy each year are aged 65 to 74 (versus 2.1% in 1991).*
- The number of Americans aged 55 to 64 declaring bankruptcy rose 66% from 1991 to 2016. For the 65 to 74 age range, the increase was even higher at 204%.**
*According to “Graying of US Bankruptcy: Fallout from Life in a Risk Society,” written by academics from various institutions, including the University of Illinois and University of Idaho
**According to a paper by Robert Lawless, University of Illinois law professor, and three collaborating colleagues.
What’s Behind the Surge in Gray Bankruptcies?
Some point to the aging of the US population when explaining the surge in gray bankruptcies. But this accounts for only a small portion of the increase. From 1991 to 2015, the 65+ population increased from 17% to 19.3%, which is nowhere near the same increase rate as seen for gray bankruptcy filings. The number of Americans 55 and older filing bankruptcy has seen dramatic increases since the early ’90s, and the increase is even sharper for Americans 65+.
Why Are Older Americans Turning to Bankruptcy?
One major factor many consider to be a significant contributor to the rise in gray bankruptcies is medical debt. 60% of older Americans cite medical debt as the reason behind their bankruptcy filing; they can’t pay their medical bills. The protections of bankruptcy offer a fresh start for those who fall on hard ties and cannot cover their financial obligations. Bankruptcy petitioners are no longer responsible for discharged debts.
If you need to file bankruptcy and have questions about seeking a discharge for medical debt, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.
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