The New York Times cited a report by the Consumer Bankruptcy Project which shows that the rate of bankruptcy has increased between 200 and 300 percent since 1990. See Business Insider, August 7, 2018.
Many of the factors that create the need for bankruptcy relief is delayed full social security benefits, an increase in out of pocket medical spending, a rise in pensions replaced by 401(k) savings plans and decreased income. See page 2.
In addition, a lot of baby boomers have incurred additional medical expenses due to greater health risks such as diabetes and obesity. Thus, when you add a reduction of income with higher medical costs, it makes things even harder for older baby boomers.
Another factor that Business Insider reported is that baby boomers are caught in the middle since they are trying to help their aging parents and children. Many boomers co-sign parent plus loans for their children. Since the debt cannot be discharged in bankruptcy, this makes it harder for the boomers with all the other factors involved.
In addition, when people ideally should have their mortgage paid off by the time they are 65, the percentage of those carrying mortgages nearly doubled from 1989 to 2016. See Business Insider, August 7, 2018, p.3.
Finally, according to a survey by the Insured Retirement Institute, only 23% of baby boomers think their savings will last through retirement and only 54% had any retirement at all. Thus, the bigger problem is that life expectancy is higher. Those who retire in their mid-60’s to early 70’s need to have enough money for 5 to 10 more years. See Business Insider, August 7, 2018 at p.3.
If you fall in this category and need help, TAIEBLAW is here to help any baby boomers or anybody who is experiencing financial hardships.
Steven N. Taieb, Esq. has been a South Jersey Bankruptcy Attorney for over 33 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.