If you have never heard the term “gray bankruptcy” before, it refers to bankruptcies by people over the age of 65. Unfortunately, this is an ever increasing American phenomenon, and if you are in this age group, you likely understand exactly why it happens.
According to the National Council on Aging, surveys indicate that older Americans face more debt today than ever before. For example, only 41.5% of households headed by someone over age 65 had significant debt in 1992. By 2010, this percentage had increased to 51.9% and to 60% by 2016.
Skyrocketing medical costs represent the main reason for today’s financial distress among older citizens. The vast majority, 84% to be exact, of people over the age of 65 have at least one chronic disease or condition. If you are one of them, another frightening statistic shows that, in the last five years of your life, you can expect to incur over $38,000 in out-of-pocket medical expenses.
The sad fact is that Social Security simply does not cover all your bills. Consequently, you may be one of the 23% of seniors who cannot afford to pay for needed repairs to your home and car. Or you may be one of the 15% who cut your prescription pills in half to make them last longer. Or you may be one of the 14% who skip meals because you cannot afford the high grocery bills it takes to eat healthily. Or you may be about to max out all your credit cards from having to use them to meet your obligations as best you can.
For all these reasons and more, a gray bankruptcy may be your only viable option.