Richard J. Shurtz, Attorney at Law

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Bankruptcy filings continue to rise for older Americans

Nationwide and in Washington state, there is a new crisis -- in the need for debt relief -- that appears to be mushrooming out of control. Tens of thousands of elderly Americans are finding that the promises of a secure retirement have disappeared into a puff of invisible air. As a result, the number of people over retirement age filing bankruptcy has increased substantially and continues to grow.

The government has not helped matters; instead, it has taken steps to decrease various programs on which older Americans were previously able to rely. Also, it has imposed increases of out-of-pocket expenses for vital life-saving programs such as Medicare, while at the same time taking away or severely reducing once-reliable programs such as food stamps. Increases in Social Security benefits to keep up with inflation have stopped or grown by tiny, negligible amounts. At the same time, inflation continues to grow, and wages continue to be stagnant.

Older Americans were able to rely on the growth and promise of such programs in the past, but wild government spending in other sectors has put too much of a pressure on the federal budget. One noticeable phenomenon is that people in their 60s and 70s are continuing to confront large mortgage balances and burgeoning credit card debt. Secondary financing of homes has eaten up the equity once seen as a mainstay for older, retired persons.

Finding good jobs in Washington state and elsewhere is near impossible for persons in these age groups. Older Americans are therefore taking advantage of the "fresh start" offered by federal bankruptcy law. A person filing a Chapter 7 can erase all credit card debt, along with medical bills and any other unsecured debt, quickly and permanently without having to make payments. Older Americans did not expect to find this kind of a rude awakening in their so-called golden years. Taking advantage of a powerful tool such as bankruptcy relief can be a life-saving measure that has little downside to it.

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