A recent article in the New York Times confirmed our anecdotal experience here at Contra Costa Senior Legal Services: older adults are struggling with debt. The article, ‘Too Little Too Late’: Bankruptcy Booms Among Older Americans, outlines in bleak terms the fate of many older adults due to conditions often beyond their control—vanishing pensions, high medical costs and lack of savings. The rate of people 65 and older filing for bankruptcy has tripled from the 1991 rate.
This phenomenon is a result of policy choices that have negatively impacted seniors. These include: longer waits for Social Security benefits, the replacement of pensions provided by employers with 401(k) savings plans funded by individuals, and higher out-of-pocket costs for health care. The NYT article is based on a study from the Consumer Bankruptcy Project, where one of the authors observes: “When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give.” While bankruptcy offers a fresh start for many, for older adults, the study finds, its protections are “too little, too late.” By the time they file, they have lost their wealth and do not have enough time to recover.
In addition to higher debt compared to generations past, older adults today are nearly twice as likely to be paying for a mortgage. About 41% of seniors today have a mortgage versus 21% in 1989. Many of the participants in the study reported that helping other family members, such as co-signing for a child’s student loan, contributed to their need to file for bankruptcy protection.
Here at CCSLS, nearly 1 in 10 of our clients seek help with debt issues. Another 24% contact us about help with evictions, which often result from the inability to pay rent. Clearly, seniors in Contra Costa are feeling the effects of the loss of the safety net. What can we do as individuals to reverse this trend? Make your voice heard and vote for policies that protect our healthcare and Social Security. If you are a senior and have questions about your rights as a debtor, check out our resources page, or contact CCSLS and schedule an appointment.