Fixed Income & Credit Card Debt: Why Retirees Are Declaring Bankruptcy

For more and more seniors, retirement doesn't mean a debt-free life of leisure. An increasing number of Americans aged 65 and older are declaring bankruptcy, according to a recent study by John Pottow, professor of law at the University of Michigan Law School.

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Comments

[PWM]

03:22 PM on 10/26/2010

20th-21st century recessions and what party was the president when it started:

Great Recession 2007-09 (Republican).
Recession of 2002-2003* (Republican).
Recession of 1990-91 (Republican).
Recession of 1981-82 (Republican).
Recession of 1973-75 (Republican).
Recession of 1969-70 (Republican).
Recession of 1960-61 (Republican).
Recession of 1958 (Republican)
Recession of 1953 (Republican).
Recession of 1949 (Democrat).
Recession of 1945 (Democrat - war related)
Recession of 1937 (Democrat)
Great Depression of 1929-42 (Republican).
Recession of 1926-27 (Republican).
Recession of 1923-24 (Republican)
Depression of 1920-21 (Democrat - war related).
Recession of 1918-19 (Democrat).
Recession of 1913-14 (Democrat).
Recession of 1910-11 (Republican).
Recession of 1907 (Republican).
Recession of 1902–04 (Republican).

*Known as the early 2000s recession.

Total:
21 Recessions (depressions always start as a recession)
16 started under Republican presidents (none were war related)
05 started under Democratic presidents (2 of these were war related)

Moral of this story: The best indicator of future behavior is past behavior, vote Republican and have a recession.

[Rooster Coburn]

12:07 AM on 10/26/2010

There was a time when individuals would finish paying off the mortgage on their home before retirement and then when their earning years ended live debt free for the remainder of their lives. Lenders would not make loans to the retired as they doubted their ability to repay them without a source of earned income. Of course up until recently a lot of seniors thought they could run up huge debts on plastic and then use the accumulated appreciation of their home equity to get a second or third mortgage and pay it all off. Then the real estate market crashed and surprise, surprise, they found themselves seriously underwater and in the hole.

[gardengranny]

10:58 AM on 10/26/2010

You have made some very sweeping statements about seniors, and the implication is that they are spendthrifts and shortsighted.

In my experience, most seniors are just the opposite, and in fact, often have to help their grown children with debts, down payments on homes, and tuition for their kids.

[G52]

05:47 AM on 10/27/2010

Agree!

[catchersmom]

10:54 PM on 10/25/2010

I would like to point out to ALL Americans that we have ALWAYS paid "PRIVATIZED CORPORATIONS" for healthcare... they are the INSURANCE COMPANIES!! How many times have you heard of or been the victim of an insurance company cancelling your policy (health, life, automobile) due to "loop holes" set up by attorneys (more privatized corporations)? Do you realize that when you vote repub that you are authorizing tax cuts to be given to the same multi-million dollar corporations that cancelled your parent's, grandparent's, uncle's, aunt's, brother's and sister's life insurance policy and most of which paid on it a lifetime? When my grandmother died, she had "3" insurance policies for the same thing, sold to her by the same agent and not "1" of them paid to bury her. What will it take for everyone to realize that there is so much greed that this will never work for Social Security. Privatizing ss is giving a corporation our money for a policy that we get to cash in when we are 65. Do you think they will honor their commitments to us? Who will regulate the premiums for these ss policies and without regulation, who do you think will be able to afford a policy from these pirates? Does everyone want our families and neighbors to die in ditches due to starvation and disease? You better wake up because this is a very real possibility if the repubs get their way.

[Misremembered 14]

05:02 PM on 10/25/2010

Debt Has Increased $5 Trillion Since Speaker Pelosi Vowed, ‘No New Deficit Spending’

[drumz]

05:07 PM on 10/25/2010

And $3 Trillion was on the wars busH started but kept off the books. What, did you misremember that too?

[WarriorLemming]

06:05 PM on 10/25/2010

heh, notice the elephant in their avvy it's the icon of a Repug unless it's indicative of morbid obesity in which case my sympathies to, Misremembered 14. It's useless explaining to a diehard Repug the mess Bush made and how eight years cannot be corrected in two years time. The Party of "No" has done their best to drag this mess even further along and they say they are more patriotic.

[marijam]

05:15 PM on 10/25/2010

I'm going to be looking for the unemployment rate to be 6% in two years should the Republicans take over Congress.

[gardengranny]

10:58 AM on 10/26/2010

Prepare to be disappointed.

[PWM]

03:15 PM on 10/26/2010

It went up to almost 11% under Reagan.

[HADAFAKAYA]

01:51 PM on 10/25/2010

Jobs are great. Money is great. I like to work. I am a carpenter.

I want and need a place to live, food and some medicine and healthcare when needed. If there could be a life with no or as little need for money as possible I am all for that, This money thing is the greatest scam ever invented to keep people as kings in place and everyone else serving under them no matter what laws and freedoms and rights we care to hold as our own.
I am liking this Johnston guy

[exercise4u2]

01:04 PM on 10/25/2010

Here is a new peppy 1-minute video giving people advice on the responsible use of debit, ATM and credit cards.

"Card Tricks Revealed: How Not To Burn Money"
http://www.youtube.com/watch?v=rKRHiA0tYCc

[enlightenedgirl]

01:02 PM on 10/25/2010

"in addition to escalating medical expenses, seniors have seen their portfolios hit hard by the lagging stock market."

Why is this point being missed most of the time? The Economic Crash known as Bush affected Millions of Seniors and most of their life savings went up in flames. Now the Republicans want to get rid of Social Security and Medicare. Where would Seniors be without these Government programs?

[drumz]

03:47 PM on 10/25/2010

We lost $70k. Vote republicant and we will lose the rest.

F&F enlightenedgirl

[marijam]

05:17 PM on 10/25/2010

And take off any and all regulations on everything. Don't forget that. Obviously, most Republicans vote for them not believing they will do a thing they say. Remember the outcry when Bush tried to privatize social security? If the Republicans try to "ram it down our throats", the outcry against health care reform is going to seem like a garden party in comparison.

[sealdadeal4me]

12:56 PM on 10/25/2010

I am always utterly amazed at how President Obama has been in office less than 2 years and he is the reason people are filing for bk today. He is to blame for foreclosures today. He is to blame for the unemployment rate today. He is to blame for the 2 wars we are in today. So if the Repugs are voted into office Nov. 3 then do they get the blame on Nov 5 for all the things that Obama and the Dems are getting the blame for today. It takes time for people to get themselves into financial problems, it took a period of 8 years for this country to get in the shape its in and it will take time to fix it, if it can get fixed at all. So if Seniors want to vote in the Repugs then we will be in reverse and it will only delay the fixing of the mess that has bee propagated on the American people.

[Revee]

09:56 PM on 10/25/2010

With repubs it is always: "Heads I win Tails you lose". It is always the dems' fault.
When absolutely cornered about 2000-2008 there is a fleeting "some mistakes were made" comment that is immediately followed by a rant on dems.
If the media is right about GOP gains this coming election, it shows that the strategy works :(.

[big fan]

10:34 AM on 10/25/2010

Obama's accumulated 3 trillion dollars of additional debt in 20 months...more than Wasnington through Reagan....15 months of 9.5% unemployment...the longest period since the great depression...yesterday, 60 Minutes reported that the real unemployment is 17%... this is depression era unemployment...created an income gap...the largest since the great depression...48,000,000 million Americans on food stamps...the largest number ever recorded...now, the largest jump in elderly bankrupcies in history...just a sample of Obama's fundmental change for America!

[julbar]

12:09 PM on 10/25/2010

Did you take out the trillion for the phony war Bush created and hid until Obama put it out there? Or this recession for which that administration holds ALL BLAME?

The last time I looked this country was in the dumper pretty deeply when this president took over and by the way does any one else have any solutions? Absolutely not.

This administration has been up against a GOP obstructionist Party in Congress (and you should be howling like crazy about that) and their, once again, deliberate schemes to derail the presidency for their own power at a cost to all Americans.

This president has just written something for the encouragement of small business to help them begin hiring. How removed are you from what is happening in the job market? I am pretty close to it, and I can tell you the mudhole Bush dropped this country into is not easy to navigate much less climb from. Educate yourself before you start spouting nonsense, you sound ridiculous.

[ryker88]

01:40 PM on 10/25/2010

F&F for absolutely correct insight.

[drumz]

04:17 PM on 10/25/2010

F&F julbar. Great tone and am glad you said it but unfortunately they are all pretty much selfish greedy homophobic illiterate racist psychopaths and trying to educate them is only a lesson in futility.

[olephart]

12:37 PM on 10/25/2010

Twelve of those 20 months were Bush's 2009 budget. The Federal fiscal year runs from October to September. The CBO estimated 2009's deficit at $1.2 trillion before Obama was sworn into office.

[big fan]

04:24 PM on 10/25/2010

The democrat congress passed continuing resolutions until Obama took office...that 1.2 Trillion is Obama. Pelosi and Reid's budget...they increased discretionay speending in that budget by 84%!

[politicalguy94]

08:03 AM on 10/25/2010

As retirees are declaring bankruptcy, all they have to support them are Social Security and Medicare, and possibly a pension. Their Social Security and Medicare would be under threat if the GOP takes Congress and attempts to cut funding to these two programs.
This gives Democrats an opportunity, for they can use all the GOP talk of cutting Social Security and Medicare funding to get retirees to get out and vote Democratic.

[gardengranny]

09:20 AM on 10/25/2010

Sad to say, many retirees in my community hate the Democrats in general and Obama in particular, and will never vote for any candidate except a Republican (or "Tea Partier" - one and the same.)

And being the hypocrites they are, the all collect SS and sign up for Medicare, both Democratic programs.

[ZiloRS]

09:25 AM on 10/25/2010

I guess that's why the conservatives like to note that people get more conservative as they get older. But they never like to note how many seniors are eating cat food to get by. Funny thing, that...

[marijam]

05:30 PM on 10/25/2010

That's because they know the Republicans lie and won't keep any of the campaign promises that they make.

[BlueSkyPilot]

06:20 AM on 10/25/2010

Under the budget proposed by the Bush Administration, the government is expected to borrow over $2 trillion from these Social Security trust funds to pay for government spending over the next ten years. Moreover, Administration officials and Republican congressional leaders have called the trust funds "a mere accounting device"1 from which employees will get "nothing in return"2 - indicating that the federal government does not plan to honor its commitment to paying back what it has borrowed from Social Security.

http://oversight.house.gov/index.php?option=com_content&view=article&id=2248:government-borrowing-from-your-social-security-contributions&catid=43:investigations

That was just about enough to pay for his "Off Budget" wars. He was able to keep it out of his deficits but it was added to the debt.

[vippy]

01:05 PM on 10/25/2010

Just amazing,while we throw away money left and right, now to Pakistan another 2 billion dollars,
and Karzai brags that he gets money from the US, planeloads of money disappeared in Iraq,
just unbelievable but yet they have no dime for their own people. Our soldiers should remember
just for what are they fighting for?

[vippy]

05:33 AM on 10/25/2010

HR 4646, to be effective after the election, and contained in the Financial Reform Bill states, that every time you do a transaction at the bank or credit union the bank/CU has to send 1% to Washington? That can't be - anyone?

[MaxPowerXP]

03:15 PM on 10/25/2010

Nope. http://www.snopes.com/politics/taxes/debtfree.asp

[investor1]

03:43 AM on 10/25/2010

Before blaming everybody else let's look at the actual focus of the article. Seniors are going bankrupt because of credit card debt. This should serve as a wake up call for the under 40 yr. population. This is the time to assume personal responsibility for your finances. Social security will only provide a portion of your retirement. You must save money yourself. Use a retirement calculator to determine how much you need to save and invest each year. If you are not saving enough you will most likely end up old and broke. This is a simple reality, you can blame anyone you want (Republicans/Democrats etc.). You can blame the man in the moon if you want. Before buying a cell phone, cable tv, or buying anything on credit make sure you have enough saved for retirement. If you don't you will only have yourself to blame.

[wdw505]

05:24 AM on 10/25/2010

well said

[vippy]

05:36 AM on 10/25/2010

I work with 130 employees in retail. Most of them are in the intermittent category, making 3 to 19 hours a week on or about minimum wage. Do tell me, how they are to save. I wish people would sometimes get out and see and familiarize themselves what is really going on. Do you really think you go into McDonald's and every one in there is fulltime? What planet do people live on these days. Food and retail are mostly intermittents, not full time, not part time but intermittents. And that old lady at the cosmetic counter in a retail store that has been working for like forever, ask her how much above min. wage she is really making?

[zell]

09:21 PM on 10/24/2010

This is an up-side-down world if the people want the Republicans and their sub-political parties in control of Congress..........Don't they know that if not for the Democrats, Social Security would have been privatized a few years ago? What kool-aid are they drinking? Folks, do not "cut off your nose to spite your face." In essence, please do not put those terrible people in charge of anything!!!!!! If you do anything, please vote them out of office!!!!!

[wdw505]

09:30 PM on 10/24/2010

so vote conservatively

[tangolas]

09:50 PM on 10/24/2010

I don't know what you are, but your no conservative.

[ScorpioTop]

05:47 AM on 10/25/2010

A vote for conservatives is a vote to wreck the government. If we do away with this government the corporations will install a new, worse government. Conservatives want to curb all spending, except when it comes to war, in war spending no price tag is too high, not even the price paid in blood.

[grbright]

11:04 PM on 10/24/2010

I'd been a he!! of alot better off with privatization. Thanks alot Dems for the losing my money in a ponzi SS system

[29bela]

12:19 AM on 10/25/2010

How better, explain.

[JoeBlough]

01:30 AM on 10/25/2010

With privatization, your monthly check would have been cut in half by a poorly performing market.

[rikster]

09:18 PM on 10/24/2010

Korporate Amerika in the 21st century....the "new " feudalism....

[barrada nicto]

09:29 PM on 10/24/2010

Soon, each corporation will have it's own candidate for president. We will vote for the corporation of our choice.

Max Headroom, here we come.

[Tulka2]

10:22 PM on 10/24/2010

"Head, head, head, room, room, room"