Mother's Day is coming up this Sunday, and many adult offspring may be wondering what they should do to celebrate the occasion. One nice gesture could be to offer to help your parents with their finances in case they are having trouble with debt, which has become an increasing problem for older adults. According to recent studies, the number of adults age 65 and up who have filed for bankruptcy has tripled since 1991. Your parents may not want to burden you with the knowledge that they are struggling with debt, but their ability to support themselves may be at risk if they do not try to alleviate their debts.
One reason that some older adults do not tell others about their financial problems is the social stigma attached to being heavily in debt. There is a misconception amongst some people that personal debt is mostly the result of poor financial decisions. However, many economists have concluded that the rising debt among older adults is because of systematic changes to retirement and healthcare over several decades that have shifted costs and risks to individuals:
- Many employers have switched their retirement plans from company-backed pensions to 401(k) plans.
- The age at which people can qualify for Social Security has risen.
- Health insurers are expecting the insured to pay more of their own medical expenses, while the average cost of those expenses increases.
With these changes, older adults may be forced to take on debt in order to pay for basic expenses, which can make them vulnerable if they have a sudden decrease in income or increase in expenses.
If your parents are baby boomers, they were raised by a generation that was particularly averse to debt because of the Great Depression. Some of that philosophy was imparted to the next generation, which may affect views on bankruptcy. If your parents are reluctant to use bankruptcy, you can explain to them the benefits of filing:
- Filing will put an immediate stop to creditor harassment.
- They will be able to discharge most of their unsecured debts (i.e. credit cards and medical bills) at the end of the process.
- They will have a chance to protect valuable assets (i.e. their home and retirement accounts).
Bankruptcy exists in order to protect consumers who are unable to repay all of their debts. Your parents should seriously consider filing if their debt has gotten out of control.
Contact a Denton County Bankruptcy Attorney
If you or a family member are contemplating bankruptcy, you should talk to a Frisco, Texas, bankruptcy lawyer at The Page Law Firm. We can answer all the questions you have about the process and get you started if you decide to file. To schedule a free consultation, call 214-618-2101 or email us directly at [email protected].