The recession of 2008 imposed financial difficulties on people in California, especially among those who are 65 years old and older. Approximately 8 percent of debtors seeking bankruptcy relief fall within that demographic. Medical debt represents the top reason seniors fall behind on their bills, and once collection agencies start to contact them, their stress rises significantly.
One attorney serving older debtors said that bankruptcy filings free them from the emotional difficulty of ongoing harassment for bills that they cannot pay. The aggressive and even unscrupulous tactics of debt collectors tend to distress older people the most. The Consumer Financial Protection Bureau reports that people over the age of 62 lodged the most complaints about debt collection agencies.
Another bankruptcy attorney has observed stress relief among older clients. She said the stress from unpaid bills caused some clients to consider divorce, but after bankruptcy ended their financial distress, they discovered that most of their unhappiness came from the debts.
A lack of financial literacy also is pushing older people to seek debt relief in court. Among the elderly, wives tend to outlive their husbands, who traditionally handled the finances. When dealing with debt on their own, older women are increasingly looking for legal help.
When financial problems overwhelm a person, an attorney could provide advice about debt relief. A review of the person's income and debts could reveal whether he or she qualifies for Chapter 7 or Chapter 13 bankruptcy protection. A lawyer could describe how a court might discharge some debts or require a payment plan. Once a person files paperwork with a court, the attorney could inform all creditors that they need to communicate with the court instead of the debtor. This could end harassment and allow a person to make a fresh start instead of falling further behind on his or her bills.