| Bankruptcy Over 65
The stress of a home foreclosures or bankruptcy filing at any age is often a life-changing event. Yet, financial problems are treated differently by different generations.
More and more often, bankruptcy is something I see happening to persons who have reached their retirement years—over 65 years of age. It is not that unusual to see couples who have worked for thirty or even forty years at a stretch, slowly saving, only to have a six-month job lay off or health problems push their finances beyond the tipping point, and lose all they have saved over the years. The main underlying reason for home foreclosures or bankruptcies is job loss or health problems, which are beyond a person’s control, is little consolidation. A bankruptcy filing still leads to a sense of frustration or even humiliation. Alternatively, some couples simply realize that without the same paycheck from work, they cannot retire and pay the medical or credit card bills they have accumulated through the years, and do not know what to do.
The group of people over 65 years of age especially does not want their own family or children to know that the years of helping them with their upbringing and education, contributed or caused their own financials ruin. Perhaps it is the pride of the generation that shows through. Many would rather endure the bill collector’s calls, letters, and lawsuits, then have the bankruptcy label become attached to their name. The retirement age group is usually harsher on themselves than any creditor ever would be.
Not so with the under 40 generation. For them a bankruptcy filing is more of an evaluated business decision. As a group, they are less willing to carry an impossible debt load forward through their wage earning years, and more willing to consider the legal option of bankruptcy. They are less concerned with the social stigma of the bankruptcy label associated with their name or on their credit report. When you think about it, who can blame them? As an example, if a mortgage salesman persuades someone to sign a variable mortgage agreement at 6% interest, and only a few years later, the interest rate becomes 12%, where is the moral shortcoming or character flaw? The mortgage lender also knew by evaluating the borrower’s income at the time of the loan, that the borrower could never pay 12% interest on a mortgage either. As the mortgage lender chose to exercise their legal options when raising interest, the borrowers become willing to exercise their legal options by filing bankruptcy. |
