Boomers Going Broke
Bankruptcy filings have been on the rise during this challenging economy. Financial struggles are impacting all age groups, and, recently, more baby boomers are finding themselves in financial difficulty. While people have considered bankruptcy a non-option, it might be the only way to eliminate debt. With retirement rapidly approaching, boomers need to have a plan in place that will allow them to get back on their feet.
A report by the American Bankruptcy Institute (ABI) Journal states that nearly 42 percent of individuals who filed for bankruptcy in 2008 were between the ages of 45 and 64. The baby boomers showed an increase in filings of two percent from 2007 study. This was the highest increase among any age range.
The reasons for boomers having financial problems are similar to those common in other age groups. High credit card debt can result in more money being needed for bills. With more bills to pay, less money goes into retirement accounts, reducing the amount of money available to build a stable financial future. The cost of higher education is an issue as well, both for boomers and their children. Tuition costs and student loans have increased considerably over the years, and boomers are feeling the pinch. While incomes may increase with higher education, it can take a long time to repay student loans.
The recent downturn in the housing market led to many boomers losing whatever equity they may have had in their homes. Refinancing has led to poor interest rates, leaving many boomers owing more than their homes are worth on the open market. Baby boomers also have unfortunately timed retirements looming. The collapse in the stock market has substantially reduced 401(k) plans. Funds that they had planned on having for retirement just are not there, and there is not time to rebuild wealth. It is crucial for boomers to deal with the reality of the situation that they are facing.
The baby boomer generation is the first generation where debt seemed normal. Despite being comfortable with debt, there is still uneasiness with bankruptcy. To some boomers, the advantages that come with bankruptcy do not outweigh the stigma that comes with filing. However, bankruptcy can reduce the financial strain you may be facing. An experienced bankruptcy attorney in your area can help you understand your situation, and help you come up with a plan that fits your needs.
At Illini Legal Services, we offer a free, no-obligation consultation to each of our clients. During your consultation, we will take the time to listen to your financial concerns and assess your case and individual situation. We have five locations to serve you. Contact us today for help!
Illini Legal Services is engaged in the private practice of law and is not a public legal aid agency. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.