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  6.  | Data Finds Debt Increasing Among Older Americans

Data Finds Debt Increasing Among Older Americans

Conventional wisdom may tell you that, in general, older Americans are more likely to have lower levels of debt. While this is generally true, according to recent data this is not the case with many types of debt.

According to the data collected by FICO from the credit files of millions of Americans, older people have lower levels of credit card debt than younger individuals. However, data shows people over the age of 40 also have more auto and mortgage debt. Although this fact is not exactly shocking, the data shows older people in general have more of such debt today than they did in 2005.

Experts say this is the case because the weak economy and job market for younger people have forced parents to take on more debt to help their kids out. As a result of the increased spending on their kids, the average credit scores of people between the ages of 40 and 49 have fallen 1.7 percent since 2005. In addition, those in the 50 to 59 and 60 and older age groups saw their credit scores decrease 1.8 percent and 3.8 percent respectively.

Oddly, the increase in overall debt for older Americans comes as younger individuals are becoming less reliant on credit cards. According to FICO, the number of those between the ages of 18 and 29 who opt to not carry a credit card has doubled to 16 percent between 2007 and 2012. Turning away from credit cards as a means of financing their purchases has resulted in an overall decline in credit card debt in this age group — from an average of $3,073 to $2,087 during this time period.

Bankruptcy Can Help

The overwhelming debt many older Americans carry can eventually force many of them to turn to bankruptcy for help. For those who are struggling with credit cards, medical bills or other forms of unsecured debt, bankruptcy can offer a fresh start. This type of debt is generally discharged during the bankruptcy process, allowing the filer to begin again relieved of the obligation to repay this debt.

For those struggling with secured debt such as automobile loans or mortgages and are facing foreclosure or repossession, Chapter 13 bankruptcy can also help. This type of bankruptcy consolidates your outstanding secured debts into a payment plan, allowing the filer to make affordable monthly payments to catch up with his or her outstanding payments. As long as payments are made, the filer can keep his or her house or car. Once the filer emerges from bankruptcy, he or she is up-to-date on the mortgage or car payments and relieved of unsecured debt.

If you are facing overwhelming debt, you are not alone. Although bankruptcy may appear an attractive solution, it should only be filed after consulting with an experienced bankruptcy attorney. An attorney can inform you of the debt relief options that would be right for your situation.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.