Gray bankruptcy refers to bankruptcies filed by senior citizens, i.e., those over the age of 65. The New York Times reports that bankruptcies filed by people in this age demographic have increased from 2.1% of overall bankruptcies in 1991 to 12.2% in 2018.
If you fit within this age demographic and face overwhelming debt, the following probably represent the reasons you find yourself in this situation:
- You likely have had to wait longer to apply for and receive your Social Security benefits.
- You likely have seen your health care costs increase dramatically in recent years.
- Your likely have seen the gaps in your Medicare coverage decrease dramatically at the same time.
- You likely have few savings.
- You likely have had to rely much more heavily on your credit cards to pay your bills.
Radical savings decline
Time was when older families could look to their substantial savings accounts to pay for medical and other emergencies. Unfortunately, such is no longer the case. Today, the median savings for families headed by someone age 60 or older is only $60,000. Families in the bottom 25% of this demographic have only $3,000 to show for a lifetime of savings.
Out-of control health care costs
At the same time the rate of savings has been declining, the rate of health care costs has been increasing. If you are like many seniors today, you must spend as much as 41% of your Social Security check on co-pays, prescription medicines, etc. You may even be in the untenable position of needing to choose between buying your meds or buying groceries.
All of the above factors come together in the perfect storm of extreme financial difficulties for many seniors. Often bankruptcy represents your only viable option.