In the past, retirement has meant relaxation, time for hobbies, travel and spending quality time with the grandchildren. According to a story published in a recent edition of the Pittsburgh Post-Gazette, people who have reached retirement age are facing increasing debt, which often means choosing between paying that debt and buying food and medicine.
This comes as no surprise. Over the years, I’ve had an increased number of retirees as clients who are in their golden years. The story is often the same. They worked hard their whole lives and expected to retire comfortably and live on Social Security and/or money from a pension. While they didn’t expect to live like kings, they never imagined struggling to provide for basic necessities. However, when the time to retire actually came, the Social Security and/or pension check seemed small in comparison to their expenses. This caused them to go into debt to pay for home repairs, car repairs, prescriptions, doctor visits, food, etc. Often times, those expenses were put on credit cards.
Eventually, as more money goes toward credit card payments, there is even less money for food, medicine and other necessities. The vicious cycle has to stop somewhere and that is when retirees come to me.
According to the Post-Gazette article, the average amount of debt for a household headed by someone 75 years of age or older increased dramatically from $13,665.00 in 2007 to $27,409.00 in 2007. In my experience, the minimum monthly payments on $27,409.00 in credit card debt would total somewhere between $700 and $1000 per month. According to the Social Security Administration, in May 2013, the average retirement benefit was $1,221.22 per month. As you can see, for a retired person relying on Social Security income, keeping up with credit card payments can be overwhelming, if not impossible.
While almost all of my clients agonize over the decision to file for bankruptcy, it can be especially hard for senior citizens to make this decision. Most of this generation grew up being told that bankruptcy was a bad thing and that you should always pay your debts, no matter what. While filing for bankruptcy is not something to be taken lightly, when you are to the point where you are unable to buy food or medicine because so much of your income is going to pay credit cards, there is really no other logical choice. Your heath and well-being should always come first. By eliminating your credit card debt with a bankruptcy, you can use your fixed income to buy the things you really need instead of throwing it all away on credit card payments.
No matter your age, if you find that you are unable to pay for your normal monthly living expenses because your credit card payments are so high, give us a call at 800-360-9392. We will meet with you for a free consultation and see what options are available to you in order that you can have some breathing room once again.