Bankruptcy Filings in Colorado Among the Elderly Have Increased, Mainly Because of Credit Card Debt
October 26, 2010
By: David M. Serafin
Not only have bankruptcy filings within the general populace increased in Colorado but so have filings for those over 60 years of age, with the primary reason attributed to credit card debt. Many of the elderly have limited incomes, typically Social Security retirement benefits combined with a pension income, and such limited income is unlikely to offset the increasing interest, late charges and other fees charged by the credit card companies.
There’s no empirical evidence as to why filings have increased among the elderly but my experience as a Denver bankruptcy lawyer is that the elderly are generally less sophisticated with using credit cards and do not have similar access to other types of credit (due to having a fixed income). Additionally, many of the elderly are not as likely to negotiate with creditors and are typically less inclined to request financial help from family and friends.
Most of the bankruptcy filings I see from elderly clients are chapter 7 cases. Having a limited income due to being retired, the overwhelming majority of my clients pass the Means Test and are not required to pay back any debts to unsecured creditors in a chapter 13 payment plan.
The minority of my elderly clients who do file for chapter 13 in Colorado do so because of a pending foreclosure (with their house being their most valuable asset) or because of a previous chapter 7 filing within the past 8 years. Those facing foreclosure often lack the ability to keep up with monthly mortgage payments (especially as they simultaneously tackle the aforementioned credit card debt).
Many of my elderly clients are also upside down on their mortgages as housing prices have decreased in Colorado (and nationwide) and are forced to file for chapter 13 bankruptcy to prevent against foreclosure.
Other bankruptcy clients, again due to limited income and having been retired and out of the workforce for several years, are forced into a chapter 13 having filed for chapter 7 within the past 8 years.