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Posted on September 12, 2008

A National Disgrace: Senior Citizens Being Forced Into Bankruptcy

Bankruptcy is a humiliating, harrowing experience for anyone. But when a senior citizen is forced to undergo it, it extracts an especially heavy emotional toll. Seniors simply don’t have decades of life ahead of them in which to advance their careers, save money, and make the arduous climb out of the financial pit that bankruptcy creates. Many are on fixed incomes, and the repayment plans required by recently enacted new bankruptcy legislation create, for many, the equivalent of a lifetime sentence to poverty. On top of all this, many older Americans still adhere to the old ethos of live-within-your-means and if-you-can’t-afford-it-do-without-it. In short, among the senior population, bankruptcy doesn’t just create problems. It permanently ruins lives.

Yet seniors, according to a recent study, are the demographic group among which bankruptcies are increasing the most rapidly. In 1991, people 55 and older accounted for only 8 percent of bankruptcy filings. By 2007, that number had soared to 22 percent.

This alarming phenomenon is the result of a combination of factors. More and more Americans are still in debt when they reach retirement age and are forced to continue working. When medical problems strike, as they inevitably do with increasing age, those who cannot work face decreased income even as medical bills are piling up. Credit cards are quickly maxed out, and then bankruptcy becomes the only available option.

This trend has led to a rising tide of human misery among those who have worked all their lives to create the prosperity we all enjoy. That the politicians are doing nothing to stem this tide is a national disgrace. Our parents and grandparents deserve better.

What’s more, the factors that have created the trend, such as out-of-control health care costs and decreasing real wages for all except the very richest in our society, are themselves on the increase. If nothing is done, future retirees can expect to be in even greater danger of seeing their golden years destroyed by bankruptcy.

At the very least, recent bankruptcy “reforms” that were heavily lobbied for by the credit industry, and that make it even harder to get out from under mountains of health care debts, must be rolled back. And if government budget cuts must be made, Social Security and Medicare are not the place to do it. Senior citizens are among the most financially vulnerable members of our society. The bankruptcy statistics quoted above prove it. Retirees, present and future, shouldn’t be forced to shoulder the burdens created by years of unbalanced budgets and government deficits.

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