Although credit card debts are common and most people are found struggling to cope up with them, new studies have shown that senior citizens are more at risk due to the high and increasing debts. An increasing number are filing for bankruptcy in order to get some relief.
As per the research conducted by the University of Michigan Law School, it has been found that 2/3rds of senior American citizens, file for bankruptcy due to a high credit card debt. This high credit card debt of those seniors who are filing for bankruptcy is 50% more than that of the younger adults who seek debt relief by filing for bankruptcy. The median age of those filing for bankruptcy has gone up sharply and has increased from 36.5 in the year 1991 to 43 in the year 2007. During the same time, 7% of those filing for bankruptcy were those above the age of 65. This seems to be a worrying trend according to Rodney Tullie, from CredAbility, a budget and credit counselor. This is likely to affect the future generations, as more and more Americans will be forced to file for bankruptcy in the years to come.
The medical costs seniors face has been escalating, and they also have to deal with the loss of the spouse, as well as investments that may be worth little or nothing due to the uncertainty in the stock market. During the real estate boom many seniors had refinanced home loans, but are now seen struggling with high mortgage loans and diminished values of their property. Hence today`s senior citizens are managing to make ends meet with the use of credit cards and this seems to be spiraling their debts totally out of control. These seniors now have to deal with increasing expenses every month and have no choice.
When seniors do not have any other income or assets, filing for bankruptcy might not be a good idea. Most seniors have turned to this as a last resort and to avoid hounding calls from creditors. As per the rights under the Fair Debt Collection Practices Act, a debtor can make a written request asking the creditor not to contact them. Although technically these people can be sued, in the absence of assets, creditors will have no way to collect the dues from them and government schemes such as social security cannot be touched, irrespective of what the creditors say.