Medical debt is the greatest source of personal bankruptcy in America, and people age 65 and older now make up about 8% of bankruptcy filers, up from 7% in 2008.
The recession hit this demographic particularly hard. In some states, creditors may garnish up to 25% of a debtor’s disposable net income monthly.
Wives also traditionally outlive their husbands, who often oversee the family’s finances, and a lack of financial literacy leads many older women to file bankruptcy.
A recent report from the Consumer Financial Protection Bureau found that debt collection was the most complained about product or service for consumers over 62. Bankruptcy can bring emotional relief and better mental health.