The note in the church bulletin says, Success is reaching Social Security age before having to declare bankruptcy. Reportedly, one third of those over 55 who lost their jobs never found another one. They tried to make the distance to age 62 or 65 for Social Security but many never made it. Many used credit cards to pay their ordinary bills for food and utilities. Even after making it to Social Security many, found the crushing usury interest rates from 18 to 34 percent overwhelming.
The headlines in the newspapers tell the story - Older Americans filing for bankruptcy in increasing numbers. Many hid their economic problems from their children as they saw how they too were struggling to survive in a ever changing job market. However, the children were not taken by surprise as their parents were who expected the American Dream to continue as it was all their lives.
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It took awhile for the children to discover the extent of their parents debt. Many of the elderly accumulated up to $100,000 of debts at up to a 34 percent interest rate.
By one expert estimate, people 55 and older now account for 22 percent of those filing for bankruptcy, up from less than 10 percent in 1994. The increase in bankruptcies came rapidly in both the Clinton and Bush era. Many of the elderly had steadfastly paid bills on time for fifty years or more. In their so called golden years, they are filing for bankruptcy losing their homes they lived in for many years.
Besides those who lost their jobs early, seniors are in financial distress for other reasons too. The exploding cost of health care including prescription drugs - have either drained savings or diverted to credit cards with the high interest rates on top of the high costs. The jobs losses contributed to the failing health too. Many even start using credit cards for food. They became helpless as interest rates rose and the balances ballooned. Once someone starts paying more than 18 percent interest the story is over and it is turns into a heartbreaking ending.
Studies show that the debt burden among the elderly began growing in the early 1990s and has only worsened since then. Many having grown up during the Depression, took special pains to live within their means but things changed with the U.S. going through an economic storm and a silent depression for years. It took only one major medical setback or nursing home stay to set the climax of financial despair.
Mary Ann Rabin, a Cleveland attorney who represents bankruptcy clients, said she used to see credit cards debts among filers of all ages in the range of of $10,000 to $15,000. Today, she said, it's not uncommon for people to owe $80,000 or even $100,000. Many who were in a small business for many years took on credit lines and credit cards to get over the lost of customers who went out of business. Reportedly, 48 percent of all small business owners maxed out their credit cards for the sake of economic survival.
With the recent change in bankruptcy laws, many now find it useless to file for bankruptcy having no assets left and can not find help since they are considered to be "judgement proof". The cost of a good bankruptcy lawyer is not cheap and filers must take a pre-bankruptcy and post-bankruptcy course too. This costs money too. Those who do not file are subject to harassment by bill collectors up to the day they die. It all happened on the Clintons and Bush watch.
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