Rising medical bills and other debts have prompted elderly Americans to seek bankruptcy court protection at sharply faster rates than other adults, according to research released Tuesday by the Consumer Bankruptcy Project.
The rate of personal bankruptcy filings for individuals between the ages of 75 and 84 soared 433% between 1991 and 2007, with the total rate of individuals 65 or older jumping by 150% in that time. During the same period, bankruptcy filings by younger Americans actually declined.
Some experts believe medical bills are the chief reason why many elderly Americans are turning to bankruptcy protection, but the study did not address the specific reasons for the trend. Health care is a big issue for the elderly and out-of-pocket expenses are going up, says George Gaberlavage, director of consumer and state affairs at the AARP Public Policy Institute.
The number of personal bankruptcy filings for all age groups declined after a stricter new law took effect in 2005. Still, when the filings from 2007 were compared with those from 1991, those of older Americans, as a percentage of all filings, have surged.
The 2007 statistics are based on a national sample that included 2,435 responses from bankruptcy filers. It is the first in several Consumer Bankruptcy Project reports supported by AARP, which will later study and spell out the individual factors behind the increase.