Articles Posted in bankruptcy

Published on:

https://www.georgiadisabilitylawyerblog.com/wp-content/uploads/sites/188/2020/01/1.2.20.Blog_-300x132.jpg
It does not take much to push a middle class family into bankruptcy.  One serious illness will drive up medical expenses or put a breadwinner out of work.  Most of my clients are not only facing debilitating medical issues, but also financial disaster.  One of the main reasons for this is the current system in which this country pays for healthcare.

Despite a low unemployment rate, Georgia remains among the top three states in the nation for personal bankruptcy filings.  While, statewide and nationally, bankruptcy filing numbers are dropping, Georgians still file for bankruptcy at two times the national average.   The monthly filing rate in Georgia is 4.43 per 1000 people.

Last year, a study published in the American Journal of Public Health  showed that medical problems contributed to over 60% of bankruptcy filings.  Medical bills account for over half of all unpaid invoices sent to collections each year.  Even with the passage of the Affordable Care Act (ACA), 530,000 families suffer bankruptcies each year that are linked to illness and escalating medical bills.  Medical bills contributed to 58.5% of bankruptcies; illness related income loss contributed to 44.3% of bankruptcies.  Many debtors cited both issues as the reason for filing.

Published on:

92353843-56a067035f9b58eba4b045a9-300x214
Older Americans, ages 65 and older, are increasingly filing for bankruptcy, with the rate more than tripling since 1991, according to a study from the Consumer Bankruptcy Project titled “Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society.” Between 2013 and 2016, 12.2% of individuals ages 65-74 filed for bankruptcy annually versus 2.1% in 1991. This trend cannot be explained adequately by the aging US population—which rose only 2.3% from 1991-2015. Instead, the study’s authors attributed this phenomenon to several problems.

First, reductions in Social Security and Medicare occurred with Congress raising the age for full retirement benefits.  Second, retirement savings shifted from typical pension plans to 401(k) plans.  These plans give workers greater discretion on how much money to save and invest. Third, other contributing factors include rising medical expenses which can quickly wither away at an individual’s savings. Finally, there are other uncontrollable factors that lead to this situation. For example, divorces, a death of a dependent spouse, and loans to one’s children or grandchildren are all situations which can lead to growing debt.

For seniors filing for bankruptcy, their chances of recovering from this ordeal are unlikely, as “they simply do not have enough years to get back on their feet.” For these individuals, their median debt is $101,600, which is three times the filer’s average income. The authors of the study predict that as America’s population grows, this upward trend among older Americans will only continue to climb.