ST. AUGUSTINE, Fla., Aug. 27, 2008
Bankruptcies Soar For Seniors, Study Finds
Medical Problems, Inability To Work Serve As One-Two Punch
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Ada Noda, 80, poses for a picture with her puppy Lolita in front of her home, Aug. 26, 2008, at her home in Saint Augustine, Fla. (AP Photo/Jake Roth)
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She declared bankruptcy.
While the bankruptcy filing rate for those under 55 has fallen, it has soared for older Americans, according to a new analysis from the Consumer Bankruptcy Project, which examined a sampling of noncommercial bankruptcies filed between 1991 and 2007.
The older the age group, the worse it got - people 65 and up became more than twice as likely to file during that period, and the filing rate for those 75 and older more than quadrupled.
"Older Americans are hit by a one-two punch of jobs and medical problems and the two are often intertwined," said Elizabeth Warren, a Harvard Law School professor who was one of the authors of the study. "They discover that they must work to keep some form of economic balance and when they can't, they're lost."
That's precisely what happened to Noda. She worked all her life, on a hospital's housekeeping staff, and later selling boat tickets to tourists. She cut corners when she needed to but always paid the bills she neatly logged in a ledger.
"I was born during the Depression," she said. "I paid the bills whether I ate or didn't, whether I went to the doctor or not."
It all worked fine for Noda, a widow for 23 years, until she was forced to undergo double-bypass surgery and deal with respiratory problems. She started using two credit cards more frequently for food and bills. Before long, she was $8,000 in debt and behind on car payments.
"I'd go to bed and all I had on my mind was bankruptcy," she said. "I had nothing left."
Noda's car was repossessed, but her trailer home wasn't in jeopardy because her daughter owns it. While she's covered by Medicare and receives $968 in Social Security each month, she relied on her job for other expenses. She had no choice but to get help from Jacksonville Legal Aid and declare bankruptcy.
Most bankruptcies are still filed by people far younger than Noda, but the percentage the younger filers make up has fallen over the 16-year period, according to the Consumer Bankruptcy Project analysis, which will be published in the Harvard Law and Policy Review in January.
In 1991, the 55-plus age group accounted for about 8 percent of bankruptcy filers, according to the study, which looked at more than 6,000 cases filed in 1991, 2001 or 2007. By last year, filers 55 and over accounted for 22 percent.
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Each age group under 55 saw double-digit percentage drops in their bankruptcy filing rates over the survey period, older Americans saw remarkable increases. The filing rate per thousand people ages 55-64 was up 40 percent; among 65- to 74-year-olds it increased 125 percent; and among the 75-to-84-year-old set, it was up 433 percent.I'd go to bed and all I had on my mind was bankruptcy. I had nothing left.
Ada NodaA number of factors are contributing to the increase. Higher prices for ordinary consumer goods have hit seniors on fixed budgets. For older Americans living below the poverty level, or not far above, a safety net likely doesn't exist for economic setbacks such as medical problems. And some fall prey to scams that cripple their finances.
Warren noted increasing numbers of Americans are entering their retirement years with significant debt and are still paying off mortgages. She said it was wrong to assume that lives of luxury are bankrupting seniors; rather, they're incurring debts to meet needs such as medical treatment.
"There's no evidence that the problem is consumerism," the professor said.
Nor is there a significant aging trend to blame. While the country is set to experience a notable age shift in the coming years, no major one took place between 1991, when the average age was 33, and 2007, when it was 36.
Frank and Hazel Peters lived frugally their entire 53-year marriage. They always rented a home but decided after the husband's retirement from a factory job that they would cash in his 401(k) and buy a manufactured home down a gravel road in tiny Hastings, a town of cornfields and potato farms.
But they fell victim to fraud when they tried to fix a plumbing problem that had black, sulphur-smelling water coming through the pipes of their new home without enough funds to fall back on. They declared bankruptcy.
"We knew we had no other option," 73-year-old Hazel Peters said. "We'd probably be out on the street."
Bankruptcy, tough no matter a person's age, is especially hard when you don't have many years left to recover. Warren said some seniors fear telling their families because they're afraid they'll be put in a nursing home if they're seen as unable to take care of their affairs.
Many who file also express a sense of relief.
Wilona Harris, 71, filed bankruptcy two years ago because of medical bills she and her husband accrued.
"This phone rang all the time. It made you not even want to pick up. Sometimes you think, 'Let me go jump off a bridge somewhere,"' Harris said at her Jacksonville home. "You have to cry and try and figure out what in the world could I do."
At least now, Harris says, she can fall asleep without crying.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
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See all 43 CommentsJust ignore gop forever. He is the best reason on here for supporting euthanasia.
"people starve and some have so much money they don''''t even know heir worth. time to tax the rich and help the poor instead of taxing the poor"
End all sales tax as this is an unfair burden on the poor and then tax the living hell out of the wealthy.
Shame on you for making life so hard for seniors and so easy for the wealthy.
"Runner!
Your turn on the carousel..."
In case anyone has no idea what I am referring to:
Logan''s Run
"cbs
Why just medical ? We pay property tax on our homes for life to support the school systems. When a person retires at 65 they should be exempt from homeowners tax as well. Their incomes drop significantly and they have paid their share and they usually haven''''t had kids in schools for a long time."
I agree.
The older generation is going for McCain because they are not buying the obama myth.
Why just medical ? We pay property tax on our homes for life to support the school systems. When a person retires at 65 they should be exempt from homeowners tax as well. Their incomes drop significantly and they have paid their share and they usually haven''t had kids in schools for a long time.
There was a movie back in the sixties that showed if people went broke the govt had a chip in their head that would kill them. In your case i wish the chip was in place now.
Your turn on the carousel...
When people can not afford to pay their bills anymore, they should be euthanized before they amass a large amount of debt that someone gets left holding.
The poor are always in debt to the wealthy because they are exploited.
"When people can not afford to pay their bills anymore, they should be euthanized before they amass a large amount of debt that someone gets left holding."
Shut up you retarded breeder. If being in debt is okay for the government, it is okay for the citizens too.
These are the people firmly in Senator Jurassic''s camp, it''s hard to feel sorry for them when they probably first voted for President screwball and now are waiting to finish the number being played on them.
To the poster who thinks she should not be allowed to own a chihuahua? May you end up in the same financial straitjacket some day so that you finally understand.
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