More Older Americans Filing For Bankruptcy

ST. AUGUSTINE (AP) - First came the health problems. Then, unable to work, Ada Noda watched the bills pile up. And then, suffocating in debt, the 80-year-old did something she never thought she'd be forced to do.

She declared bankruptcy.

While the bankruptcy filing rate for those younger than 55 has fallen, it has soared for older Americans, according to a new analysis from the Consumer Bankruptcy Project, which examined a sampling of noncommercial bankruptcies filed between 1991 and 2007.

The older the age group, the worse it got; people 65 and older became more than twice as likely to file during that period, and the filing rate for those 75 and older more than quadrupled.

"Older Americans are hit by a one-two punch of jobs and medical problems, and the two are often intertwined," said Elizabeth Warren, a Harvard Law School professor who was an author of the study. "They discover that they must work to keep some form of economic balance, and when they can't, they're lost."

Noda was doing fine until she was forced to undergo double-bypass surgery and deal with respiratory problems. She started using two credit cards more frequently for food and bills. Before long, she was $8,000 in debt and behind on car payments.

Most bankruptcies are still filed by people far younger than Noda, but the percentage the younger filers make up has fallen over the 16-year period, according to the Consumer Bankruptcy Project analysis, which will be published in the Harvard Law and Policy Review in January.

In 1991, the 55-plus age group accounted for about 8 percent of bankruptcy filers, according to the study, which looked at more than 6,000 cases filed in 1991, 2001 or 2007. By last year, filers 55 and older accounted for 22 percent.

Each age group younger than 55 saw double-digit percentage drops in their bankruptcy filing rates over the survey period; older Americans saw remarkable increases. The filing rate per thousand people of ages 55 to 64 was up 40 percent, among 65- to 74-year-olds it increased 125 percent, and among 75- to 84-year-olds it was up 433 percent.

A number of factors are contributing to the increase. Higher prices for ordinary consumer goods have hit seniors on fixed budgets. For older Americans living below the poverty level or not far above it, a safety net likely does not exist for economic setbacks such as medical problems. And some fall prey to scams that cripple their finances.

Warren noted that increasing numbers of Americans are entering their retirement years with significant debt and are still paying off mortgages. They are incurring debts to meet needs such as medical treatment