As Connecticut residents or others around the country reach retirement age, many dream of spending time with their families, traveling, taking up a new hobby or embarking on a different career. However, increasing numbers of retirees are experiencing financial turmoil. Reports from the Employee Benefit Research Institute show that the average amount of debt for seniors has risen from just over $32,000 to over $36,750 from 2010 to 2016. This is almost a 15 percent increase in just six years. Many older consumers are now considering filing for Chapter 7 or Chapter 13 bankruptcy for relief.
A factor in the increase in debt for senior adults is the rise in the cost of health care. In addition, the cost of living continues to rise; however, incomes are not increasing at the same rate. Some individuals may want to retire, yet cannot do so because they have significant debt and no savings. Social Security benefits are often not enough to cover routine expenses, health care costs and debt payments.
Experts suggest taking a close look at one’s financial situation to see if there are ways to reduce debt. If someone doesn’t have a budget in place, it is a good idea to create one. Knowing that health care is going to be a major part of expenses, it is also beneficial to evaluate various options to ensure that the most cost-efficient one is in place. It may also be possible to negotiate ways to reduce the amount of debt through creditors. Finally, seniors may have to consider taking on a part-time job or eliminating most unnecessary expenses.
Sometimes, all the actions an individual may take to reduce his or her debt are simply not enough. The best course of action may be to file for Chapter 7 or Chapter 13 bankruptcy and get a fresh start on one’s finances. A Connecticut bankruptcy lawyer can explain the differences between these two types of consumer bankruptcy as well as other options available for debt relief. An experienced attorney will work with clients to create a plan to get them back on track.