Illness, bad luck fuels rise in bankruptcy for seniors.

Byline: Scott Baughman

This is the second in a series of articles looking at how the aging of America's population is affecting the practice of law.

While it may be said that the greatest wealth is to live content with little, this idea may be small consolation to the growing population of elderly Americans filing for personal bankruptcy.

While part of the increase may be attributable to the aging of America's population, a study conducted from 2013 to 2016 which was published in August shows that the problem is perhaps further reaching.

"The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect," the authors wrote in "Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society."

The study, which was a collaborative effort of scholars from multiple states, found that Americans between the ages of 65 and 74 are three times as likely to file for bankruptcy as they were in 1991 and that one out of every seven people who filed for bankruptcy during the time of the study were age 65 or older.

Several North Carolina attorneys who work in personal bankruptcy law said it's usually not mismanagement or lack of effort that leads the elderly to file for bankruptcy, but more often just simply bad luck. Living on a fixed income, like retirement or Social Security, is a big part of the problem, especially when an unexpected expense arises.

"Many older clients are susceptible to bankruptcy because they are living on fixed incomes," said Damon Duncan of the Duncan Law Firm in Greensboro in an email. "This was especially noticeable in the most recent recession when people's retirement accounts took a significant hit due to the market."

Doug Wickham of Raleigh said one explanation for the increase in the elderly filing for bankruptcy is the abundant availability of credit, coupled with the fixed income.

"We have gone through a period where the institutions that sell money, the issuers of credit cards have been more aggressive," he said. "So, it is somewhat more likely that people whose income is interrupted are more likely to be carrying a bunch of debt."

Living on the edge

Duncan said that longer life expectancies have also led to more people living with chronic health conditions, leading to more bankruptcies.

"Someone with a chronic illness can easily be forced into bankruptcy if they don't have good health insurance," Duncan said. "There is no...