Bankruptcy protection for the sandwich generation and the elderly
In January, the total number of bankruptcy filings fell 11 percent to 78,471 from last year. The numbers are projected to continue falling this year as households cut debt and take advantage of lower interest rates. Even as the number of bankruptcy filings decreases, the proportion of older filers continues to increase.
The "Baby Boomer" generation may have been the worst hit by the recession and is sandwiched between caring for aging parents and providing help to adult children. Elderly parents might find that their social security does not stretch to meet their needs, while adult children leave college burdened with hefty student loans and entry-level wages.
The Pew Research Center recently released statistics for middle-aged adults:
- 27 percent pay to support an adult child
- 21 percent have financially assisted a parent over the age of 65 in the last year
Some middle-aged and early retirees are providing financial support for both their adult children and their older parents. The squeeze becomes even more difficult when coupled with a job loss or another financial setback.
Often as the debts mount, it becomes impossible to repay all the obligations. Seniors stretched to the max and considering bankruptcy are not alone. A University of Michigan study found that older people represent the fastest growing group of bankruptcy filers in the United States.
Fixed incomes and inflationary pressures
For those who are in early retirement on fixed incomes the rising costs of everyday necessities, such as gas, food, medical and prescriptions costs also become a concern. Housing values still have not increased substantially lowering the ability to tap into lines of equity credit.
Bankruptcy for the elderly is one way to eliminate financial stress that comes along with falling farther behind on bills. Chapter 7 bankruptcy forgives most, if not all unsecured debts. Examples of unsecured debt are medical bills, credit card debt and utility bills. Filing for bankruptcy protection will stop all credit harassment.
Chapter 13 bankruptcy requires a three to five year payment plan. It is an option can sometimes help a homeowner with equity avoid foreclosure and protect other property.
Each individual's situation is unique. A bankruptcy attorney can sit down with you and review your financial picture. Whether you are stretched in the middle trying to offer support to both aging parents and adult children or you find social security does not cover all your expenses with inflation, an attorney may be able to help you get back on solid financial footing.
