We often note that bankruptcy often happens for unplanned and unforeseen reasons. Accidents that leave you out of work or a purchase of your employer by another company that decides to close your office or plant.
And it sometimes happens to those whom many would believe would be immune to such mortal failings as bankruptcy filings, like Hollywood actors and NFL stars. But it does, because situational and financial troubles can strike anyone at anytime. Those who avoid bankruptcy are often just luckier.
For instance, the fastest growing group that is looking to bankruptcy protection is seniors. There are multiple reasons, but one large factor is parents who cosign student loans for their children.
The Great Recession and the extremely anemic job market, combined with low wage growth overall has left many people age 65 and older in the unpleasant and surprising position of filing a Chapter 7 or Chapter 13 petition in bankruptcy court.
Another factor is that of insufficient savings or planning for retirement. Gone are the days when most employers provided plush retirement pensions, which when combined with Social Security, meant many seniors could retire comfortably, often with practically no debt.
The Great Recession, with its job losses and the wiping out of trillions in residential real estate valuation left many older Americans in poor economic condition and instead of maximizing their savings for their retirement, many were left scrambling to find a new place to live or attempting to refinance a mortgage under very undesirable conditions.
Source: CNBC.com, “Dying with debt can prove costly … for the survivors,” Ilana Polyak, special to CNBC.com, July 6, 2015