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More baby boomers are struggling with debt

Financial troubles can hit people of any age. Some of those in Tennessee who are struggling with debts they cannot pay are young adults or are middle aged. However, one study has found that older adults are also struggling with debt, leading some to file for bankruptcy.

A study called the Consumer Bankruptcy Project collected data on who was filing for bankruptcy since the 1990s. The results of the study showed that one in seven individuals who declared bankruptcy in the United States are age 65 and up. Specifically, in 1991, of those individuals who filed for bankruptcy only 2% of these bankruptcy filers were 65-years-old or older. However, by 2016 the number of bankruptcy filers who were 65-years-old or older constituted 12% of those who filed for bankruptcy. During that same time period, the percentage of elderly people in the U.S. only rose from 17% to 19.3%. A U.S. Federal Reserve survey showed that in 1989 one-fifth of those in the U.S. age 75 or older carried debt. However, by 2016 that number jumped to 50%.

One reason for this increase in debt and bankruptcy filings by baby boomers may be the disappearance of pensions as a part of their retirement savings and the fact that their income did not increase when inflation did. Currently, only 35% of baby boomers have a pension plan, and only 60% had retirement assets or a savings account. In addition, health care has become more expensive, meaning those on Medicare must pay medical expenses not covered by the program. This has led some to file for bankruptcy.

However, filing for bankruptcy, whether it is Chapter 7 bankruptcy or Chapter 13 bankruptcy, does not deserve the negative stigma many associate it with. Both types of bankruptcy give individuals the fresh financial start they need to get back on their feet. Chapter 7 bankruptcy -- also known as "liquidation bankruptcy" -- allows debtors to sell many of their assets to pay back their creditors, and once that is done, many, but not necessarily all, of their debts will be extinguished. In a Chapter 13 bankruptcy, debtors will follow a court-approved repayment plan to address their debts in a way that is economically feasible for them and, once the three to five-year plan is up, many, but again, not necessarily all, of their debts will be forgiven. In either case, filing for bankruptcy can be a means for people of any age who are struggling with debt to have these debts addressed in a financially responsible way.

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
Fax: 423-877-0363
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