During the years that many California residents are building their careers and raising their children, retirement seems like a glimmering mirage on the horizon. Many people envision their golden years as a time to finally relax and enjoy the fruits of a lifetime of working and raising a family. They picture evenings spent on the front porch, afternoons spent with their grandchildren, and growing old in good health and good spirits. In reality, however, many older Americans will face crippling debt in their later years, and will consider filing for personal bankruptcy.
Debt can come on in a number of ways. For some, residual debt accumulated in middle age will remain in place during retirement. Others may encounter a significant illness or injury that piles on medical debt in a very short period of time. For some, providing financial assistance to children and grandchildren will create a retirement budget crunch, and the need to take on additional debt.
Regardless of the reasons behind high levels of debt, it is important to take steps to relieve debt pressures. According to a study by the National Council on Aging, more than half of seniors are struggling with debt. Those obligations are most often medical expenses, although utility bills and credit card debt can also be a burden. In an effort to save money and repay those obligations, many seniors will go without prescribed medications, skip doctors appointments and reduce their spending on food. This can lead to serious health consequences.
For many in California, excessive debt in retirement simply cannot be dealt with by repayment efforts. The only way to effectively eliminate these debts is through a personal bankruptcy filing. No one envisions bankruptcy as part of retirement, but when debt reaches unmanageable levels, bankruptcy is a powerful tool to regain financial stability.
Source: The Washington Post, "Be attuned to seniors who carry a burden of debt", Michelle Singletary, Feb. 9, 2016