Is Filing For Bankruptcy In Retirement A Good Thing?

The number of people filing for bankruptcy protection in retirement has soared in recent years — even before the recession.

In fact, people 65 and older are the fastest-growing segment of the population seeking bankruptcy protection, according to a recent study from the University of Michigan Law School.

The problem is simple math, said Johanna Sweaney Salt, a CPA with Kaufman, Schmid, Gray & Salt in Claremont, Calif. Their medical expenses, taxes and other costs keep going up, while their income is going down. Social Security hasn’t had a cost-of-living adjustment in a long time and pensions and retirement accounts took a huge hit during the recession. Reverse mortgages and other alternatives presented to them as "solutions" often just dig them further in the hole.

"Most people think ‘Oh, I have Medicare — I’m covered,’" said Jean Setzfand, director of financial security at the AARP. "But in fact, there are quite a lot of out-of-pocket expenses — and those continue to rise." The biggest one, she said, is long-term care costs. Plus, a lot more people are going into retirement carrying a mortgage. So it is not so good as we think

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  • Flower
    Lv 7
    9 years ago
    Best Answer

    Filing for bankruptcy would not include long term care since you have to pay monthly for assisted living or nursing care. You are correct that those are out of pocket costs unless you are on Medicaid.

    What is the reason you are filing for bankruptcy? If it is credit cards and you are not planning to buy anything, I would agree, if your debts are substantial enough like $10,000, to make it worth the loss of credit. Since you wont be able to get credit afterward, you should think carefully. What credit you can get will be at exhorbitant costs. If you dont have a job you wont be able to do some things like rent a car, rent an apartment, reserve a hotel room without credit cards.

    Medical out of pocket for those who dont have Medigap can be substantial, it is 20% or more of the medical bills.

  • Buffy
    Lv 6
    3 years ago

    For Finance and credit solutions I always visit this site where you can find all the solutions. http://personalcreditsolutions.info/index.html?src...

    RE :Is Filing For Bankruptcy In Retirement A Good Thing?

    The number of people filing for bankruptcy protection in retirement has soared in recent years — even before the recession.

    In fact, people 65 and older are the fastest-growing segment of the population seeking bankruptcy protection, according to a recent study from the University of Michigan Law School.

    The problem is simple math, said Johanna Sweaney Salt, a CPA with Kaufman, Schmid, Gray & Salt in Claremont, Calif. Their medical expenses, taxes and other costs keep going up, while their income is going down. Social Security hasn’t had a cost-of-living adjustment in a long time and pensions and retirement accounts took a huge hit during the recession. Reverse mortgages and other alternatives presented to them as "solutions" often just dig them further in the hole.

    "Most people think ‘Oh, I have Medicare — I’m covered,’" said Jean Setzfand, director of financial security at the AARP. "But in fact, there are quite a lot of out-of-pocket expenses — and those continue to rise." The biggest one, she said, is long-term care costs. Plus, a lot more people are going into retirement carrying a mortgage. So it is not so good as we think

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    Source(s): For Finance and credit solutions I always visit this site where you can find all the solutions. http://personalcreditsolutions.info/index.html?src...
  • Gail
    Lv 4
    4 years ago

    It seems like a lot, but that's not too much debt. Lots of people your age have much more. When I graduated from college I was automatically $16k in the hole on student loans. Then I bought a car that put me another $15k deeper. Your problem isn't with the debt, but lack of work. Also, I think it's harder to file for bankruptcy - and you'll have to hire a lawyer and pay for various fees. It would make more sense if you had a lot worse debt. But it doesn't seem worth ruining your credit for 7 years, when you're only $10k in debt. I know it's hard finding a job, these days. But I think you should put a lot more effort/energy toward doing that. You'll find something. I had to do that before. Even if it's something temporary to get you through the tough times. In a couple years, when you're back on your feet, you'll have a lot more opportunities if you have a cleaner credit report.

  • Anonymous
    5 years ago

    This site can solve your problem very fast: http://www.CREDIT-COMPARE.NET

    RE:Is Filing For Bankruptcy In Retirement A Good Thing?

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  • Arlyn
    Lv 6
    3 years ago
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