According to a 2018 survey by Northwestern Mutual, the average household debt for older Americans was $36,000 and comprised of mortgage obligations, credit card debt and automobile loans. While the figure owed is less than other age groups, the study found this same age group has less in savings and retirement, meaning baby boomers and seniors will have to work longer and push off retirement. Some may even have to find a second source of income to pay regular bills and debt.

While the rising costs of com­mod­ities and layoffs during the COVID era have hit all consumers hard in recent months, seniors are especially vulnerable because of their already fragile budgeting on their fixed income.

Some seniors rely on credit cards or high interest loans to pay groceries, home repairs or medicine. More and more seniors are taking on obligations to raise their grandchildren, oftentimes without monetary help. Seniors are more willing than other age groups to forgo necessary medicine or cut the dosage in half when insurance doesn’t cover the entire cost. Seniors living on a fixed income also face hardships when it comes to taxes and unexpected repairs to their car or home, forcing them to take loans or put the necessary expenditures on credit.

Bankruptcy filings for older Americans are rising and are expected to continue to rise as the population ages having to exit the workforce and rely on Social Security and saved retirement.

Most consumers file bankruptcy only as a last resort after carefully considering other alternatives. Seniors may be especially hesitant to discuss bankruptcy as an option to alleviate their debt because of moral obligations and may feel immense guilt that they cannot repay their contractual duties. This feeling of guilt coupled with the feelings of helplessness and stress caused by mounding debt put seniors at risk for even more health problems.

Negative health effects caused by financial stress cannot be understated, particular so for the older population.

There are two main types of bankruptcies for consumers: Chapter 7 and Chapter 13. Each act differently to alleviate debt and are income and situation dependent. Each chapter deals with secured debt, or debt that is attached to collateral, and unsecured debt differently.

Both chapters have attorney fees and costs associated with them and those fees and costs should be weighed against the benefit of being debt free and what other options the client may have. In some jurisdictions, seniors on a fixed income may be able to get their Chapter 7 filing fee waived.

Many seniors may be “judgment proof,” meaning that even if they were sued for their obligations, the client has protected assets and income that cannot be used to collect a debt or enforce a court judgment. In this situation, the debtor may not need to file bankruptcy at all.

Another way to help alleviate some stress for seniors may be to contact harassing collection agencies with a cease and desist letter. Federal law requires collection agencies to stop contacting the debtor after receiving such a letter. The letter does not cancel the debt, but it may give seniors peace of mind and an end to constant calls.

Bankruptcy is just one way for people to free up money for necessary expenditures that the client has been delaying like medical and dental necessities, taxes or repairs and maintenance on vehicles and homes.

Bankruptcy also can alleviate debt that will follow those in a probate matter after death, ensuring heirs won’t have to deal with the burden of debt while grieving. Most importantly, bankruptcy and any other debt relief will empower the individual that they faced their debt, took steps to alleviate it and ensured they have peace of mind, as well as hope for the future.

Most people want to pay their debt and make every effort to do so when possible, but bankruptcy still has a negative stigma. It is important for debtors to discuss their situation openly and have an honest discussion about their options. For most people, just taking the step to talk and get a plan formulated will make them feel empowered about their situation and how they are going to take on the future.

Speaking with a bankruptcy attorney who lists all options, not just bankruptcy, will help seniors in this unprecedented and unpredictable time.

Mary Burnett is an elder law and estate planning attorney at Burnett and Griffin PLLC in Elizabethtown. She can be reached at

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