Broome County Family Law Blog

Older adults in New York are more likely to have to declare bankruptcy than in previous decades. People 65 and older now make up 12% of people filing for bankruptcy compared to about 2% in 1991. Between 1991 and 2016, there was a 66% increase in people between the ages of 55 and 64 filing for bankruptcy. For people aged 65 to 74, it was a 204% increase.

The increase is largely due to medical bills. One 66-year-old retired handyman is a typical example. He had several injuries that led to medical expenses he could not meet, and he eventually had to declare bankruptcy. His focus was on trying to get his bank to agree to a loan modification that would let him stay in his home of 40 years. Many people lose their savings, and since they may be working less or not at all, they may be unable to recover financially.

Counseling has helped some New York couples save their marriage. Other couples decide that divorce is their best option. Most who have decided to go the route of divorce will say that it was not an easy decision, especially since there is usually not one single factor that caused the marriage to fail. There are usually red flags that show a marriage is heading toward its end.

Some couples decide that they will stay together because they think it is best for their children despite the fact that they have an unhealthy, combative, or disrespectful relationship. While divorce is not necessarily the solution, it is usually inevitable after the kids grow up and leave home if each partner does not work on the marriage in the meantime. There should be more to a couple's relationship than just the children.

New York is home to some of the nation's finest universities, and the students who attend them often take on tens of thousands of dollars of debt to pay their tuition and living expenses. Individuals who are struggling to make student loan payments often believe that this type of debt cannot be discharged in a personal bankruptcy, but this is not always true. While the Bankruptcy Abuse Prevention and Consumer Protection Act does make student loans exempt from discharge most of the time, the 2005 law does allow relief to be granted to prevent undue hardship.

The problem facing bankruptcy filers is that the lawmakers who drafted the bill were not clear about what 'undue hardship" actually means. The Department of Education is working to create a definition to clear up the ambiguity, but determining what is and what is not an undue hardship is currently the job of the courts. Most courts use the Brunner test to evaluate hardship. The test is named after the plaintiff in a 1987 New York bankruptcy case.

Most of the people in New York and around the country who file personal bankruptcy do so because of overwhelming medical debt, and many of them find themselves in an unsustainable financial situation after losing their health insurance coverage. Individuals often lose their health insurance after leaving a job or going through a divorce, and a coverage gap of only two years makes bankruptcy twice as likely according to a recent study.

Researchers from the University of Denver and the University of Missouri discovered the link between health insurance coverage gaps and personal bankruptcy filings after examining 12,500 Chapter 7 and Chapter 13 cases using data from the Bureau of Labor Statistics. The study worries experts because about 20 million Americans could lose their health coverage if the Affordable Care Act is ruled unconstitutional. The matter is currently before the U.S. Court of Appeals for the Fifth Circuit.