An increasing number of people in Maryland and across the country are filing for bankruptcy after the age of 55. Since 1991, the numbers have increased dramatically as have bankruptcy filings for those 65 and older. Bankruptcy can provide an important path for debt relief when people are struggling under the weight of unrepayable debt, collector calls and a declining credit score. It can allow people to escape the burden of discharged debt although there can be serious repercussions for people’s access to credit.
Between 1991 and 2016, there was a two-thirds jump in the number of people between 55 and 64 choosing to declare bankruptcy. For people over 65, that number more than doubled. While only 2% of people who filed for bankruptcy in 1991 were over 65, by 2019, that figure had reached 12%. Medical bills are one major factor leading older Americans to file for bankruptcy. Like credit card debts, personal loans, home loans and other debt, medical bills can be discharged in bankruptcy. Costly medical care can deplete people’s savings, leaving them with little to help them respond to later needs.
Some people refrain from filing for bankruptcy because they are worried about the effect on their credit score. Bankruptcy deals a sharp blow to creditworthiness, but most people who file already have a damaged credit rating due to their mounting debt and late or missed payments. In the post-bankruptcy period, people can rebuild their credit by starting with a secured credit card and moving forward to a regular card after a period of regular payments.
For people of any age struggling with insurmountable debt, bankruptcy can provide a mechanism for debt relief and a new financial future. A bankruptcy attorney may provide advice on how Chapter 7 or Chapter 13 bankruptcy can help people to move forward.