More seniors struggling with debt

Many look forward to retirement as a time when they will be able to relax and enjoy life. People may dream of travelling, spending time with family or dedicating time to hobbies. However, the reality for many seniors in the U.S. today is that what are supposed to be their "golden years" are fraught with financial anxieties. Many seniors are struggling with mounting debts and have no way to repay them.

Financial challenges for seniors

Seniors are facing unique strains on their finances that other age groups may not have to handle. Many are struggling to pay for rising health care costs, amassing a great deal of medical debt while battling illnesses. Others have tried to help children who may have lost jobs during the Great Recession that began around 2008, or tried to help grandchildren finance the skyrocketing costs of their college educations.

In many cases, the sluggish economy means that seniors have not had as much in retirement savings as they had planned on having when the economy was performing better. Those who try to return to the workforce to make ends meet face stiff competition for jobs from younger applicants.

Various debts increasing for seniors

In an effort to try to meet basic needs, many seniors have begun to borrow. A report from AARP released in January 2013 revealed that credit card debt is higher among seniors in the U.S. than in younger generations, which is different than it had been in the past. Those over 50 years old had an average of $8,278 in credit card debt in 2012, while those under 50 years old had an average of $6,258 according to the report. The report also showed that credit card debt rose for those 75 years and older, while every other age group paid down their debts.

Many seniors are also carrying more mortgage debt than in the past. The Employee Benefit Research Institute analyzed Federal Reserve data and discovered that the average amount of debt held by those 65 years and older increased by 83 percent between 2001 and 2010, and much of that debt was housing-related. The St. Louis Federal Reserve reported that families headed by a person 60 years old or older had the greatest increase in percentage of mortgage debt between 2000 and 2012. The increase is attributable to seniors' needing to borrow against their homes' equity to pay debts.

Bankruptcy may be an option

Living on a fixed income means that it is less likely that seniors will be able to dig themselves out from under the mountains of debts that they are amassing. Filing bankruptcy may be one way for seniors to deal with their financial problems. Much of the unsecured debt that seniors carry, such as credit card debt and medical bills, can be discharged in bankruptcy. Eliminating these debts frees up seniors' limited incomes to meet their basic needs without having to resort to borrowing more.

If you are having difficulties paying your debts and feel like you have no options, speak with an experienced bankruptcy who can help you decide if filing bankruptcy would be beneficial for your circumstances.