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Studies reveal that many older Americans have money troubles

A recent study suggests that a worryingly high number of senior citizens in Illinois and around the country are struggling to cope with unmanageable financial situations, and spiraling medical debt is often to blame. Bankruptcy filings among Americans 75 years of age or older increased by 300 percent between 1991 and 2016 according to figures from the Consumer Bankruptcy Projects, and Chapter 7 or Chapter 13 petitions made by individuals between the ages of 65 and 74 more than doubled.

Americans of retirement age now account for one in seven personal bankruptcy filings. Experts say that this figure has grown by about 500 percent in less than 30 years as the baby boom generation began leaving the workforce in larger numbers. This is a concern for experts and lawmakers because almost one in four Americans will be of retirement age by 2050. The CBP report, which was based on a survey of 895 personal bankruptcy filers, was published by the Social Science Research Network in July 2018.

The bankruptcy study also sheds light on the reasons why so many older Americans are struggling with debt. More than two-thirds of the respondents said that losing their jobs or having insufficient retirement savings had left them financially vulnerable, and 62 percent reported that soaring medical bills had prompted them to pursue debt relief. The researchers put this down to changing Social Security eligibility requirements and the ongoing shift from traditional pensions to 401(k) savings programs.

Many older Americans deal with harassment and abuse from debt collectors for years before exploring their debt relief options because bankruptcy is cloaked in myths and misconceptions. Attorneys with experience in this area may put these misunderstandings to rest, and they might also explain that the automatic stay issued in bankruptcy cases puts a halt to collection efforts and any legal action being taken in pursuit of a debt.

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Schlueter Ecklund & Davitt
4023 Charles Street
Rockford, IL 61108

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