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.
Experts say those who are able to continue making money should try to save 10% to 20% for emergencies. They may be able to get a secured credit card to help them rebuild credit. This involves putting down a deposit of a few hundred dollars and getting that amount in credit. After about a year of regular use and payments, it may be possible to get a regular credit card.
Situations such as job loss or divorce can also lead to overwhelming debt. People who find themselves in these circumstances may want to talk to an attorney about their options. The person may be eligible for Chapter 7 or Chapter 13 bankruptcy. Eligibility is based in part on income. One advantage of a Chapter 13 bankruptcy is that a person might be able to keep a large asset such as a home with a payment plan.