The definition of bankruptcy is the legal status of a person or other entity that cannot repay it’s debts and files a bankruptcy petition with the appropriate Court requesting the debt be discharged. In Florida, thousands of debtors file for bankruptcy every month. For most it is a measure of last resort. Many debtors try for years to pay their debt before succumbing to the realization that it virtually impossible.
A recent trend is that older debtors are beginning to file bankruptcy with more frequency. The rate is more than double what it was in the early 1990’s. The rate of debtors over the age of 65 filing for bankruptcy increased over 200% from 1991 to present. This increase is caused in part by the medical bills as well as the lower incomes they receive and the nationwide decline in pension, retirement pay and interest rate earned on money saved or the death of a spouse. Many resort to living with their children or doing without necessities to pay their bills.
Medicare does pay some health care costs, but it does not cover extensive care, hearing aids, dental procedures, eye exams, foot care and some other treatment. Sometimes there are co-pays, coinsurance and deductibles. The skyrocketing medical costs are just too much. Sometimes Churches, friends or family will help. However, once they get behind on their bills, the constant calls from bill collectors are just too stressful and they contact a bankruptcy attorney for help.
Most debtor’s over 60 are reluctant to file for bankruptcy. They have a stronger sense of a moral obligation to pay. Some have parents that grew up during the Great Depression or were part of the “Greatest Generation”. The decision to file for bankruptcy takes place over time.
Most debtors struggle for years in what’s know as the “sweat box”. Most deplete all their assets when it wasn’t necessary. The assets could have been protected and kept under the bankruptcy laws. It’s a very difficult and painful decision, but one that ultimately leaves them in a better financial position for their Golden Years. The over 60 year old clients are some of the most appreciative clients I have. They are respectful, compliant and will bake you a cake from scratch for your birthday. At least one I’ve represented does.