A Cruel Retirement, Part One: Medical Crises

Retirement is supposed to be a great time of our lives. Everything is paid for, the kids are grown and you are ready to travel. Unfortunately, this image is more ideal than real. The truth is that retirement for many people is difficult. Whether this fact impacts you or an elderly loved one, it is important to understand that the dynamics of filing for bankruptcy are very different when we are older.

A recent article in a London publication documented that there has been a dramatic shift in England of the number of elderly people who have financial troubles. Bankruptcy attorneys are seeing a similar shift in the United States and, particularly, in Texas. There are so many causes of this problem that it is hard to focus on any one reason.

Part of the problem is health care. We tend to have more health problems in our later years. While insurance sometimes pays a majority of these costs, even the deductible can be devastating to someone on a fixed income. I have found that many people really do not have a feel for how difficult it is to live on a fixed income. Yet, those same people often live check to check themselves. Imagine living on an income that does not adjust for rapid inflation. Even gasoline costs have increased. And medical creditors are among the most vicious creditors of all. They do not take “no” for an answer. The days when you could pay just $10 a month to a medical creditor are gone. Hospitals often turn people over to a collection agency soon after their hospital visit, and the phone calls begin immediately. Elderly people are often not able to withstand the intense pressure of collection professionals, who will ask questions such as, “don’t you believe in paying your bills?”

People in their later years are very proud. They have worked all of their lives, paid all of their bills and done quite well for themselves. Suddenly, they are faced not only with little income but with little or no prospects for generating enough income to be able to dig themselves out of a hole. When a bill collector begins the harassment, it is not simply an annoyance for most people in their mature years. People who have always been able to write a check and make that payment suddenly have their honor and their worth challenged.

Even if an elderly person can get past the simple embarrassment and emotional end of being harassed by a medical bill collector, a real fear is that more such creditors may be on the way. The sad truth is that when both spouses are suffering from health issues, there is no escape. The fear that you may not be able to get treatment for your spouse if you do not pay current medical bill is one most of us can relate to. We would do anything for our loved ones. Don’t forget, bill collectors know this and use it extensively when dealing with those who have medical debt. Such collectors often suggest helpful hints for paying the medical debt — all you have to do is pull out that credit card that has had a zero balance for years and pay the bill. When you do that, the calls will stop, the bill is gone and you can feel good about yourself again. An instant solution. Unfortunately, far too many people succumb to that suggestion.

If you or a loved one is facing a medical debt situation, consider talking to a bankruptcy attorney PRIOR to depleting the resources that may be needed to sustain your years of retirement. The consultation is free and there may be other options. However, until you sit down with an experienced attorney, you will not know if bankruptcy can help.

A Cruel Retirement Part Two – Non-Fixed Expenses on a Fixed Income

In the first part of this article, we explored how medical debt can be a very crippling economic reality. Of course, retirement is supposed to be a great time in our lives. That is the reality for some people, but how circumstances hit your life can really shatter the plans you have for retirement.

Many of us wake up to find out that the plan we thought we had was not successful. We may have planned to go to school, get a job, get married, raise a family, play with the grandchildren, retire and possibly travel. What we did not expect were the emergencies in our life.

Either we or a family member may have experienced a divorce. Sometimes that reduction of income, if it happens to us, requires a longer work life than we had ever anticipated. Instead of putting all of our disposable income away in a retirement fund, we had to raise a family by ourselves. Repairs to the house had to be put on a credit card to allow us to put food on the table.

Another scenario we see in our office is the one in which the grown child moves back home. Either they have gotten divorced or have lost what used to be a solid job. Suddenly the grandparents are thrust back into the role of supporting the whole family. Sometimes, there is an unplanned pregnancy and we have a whole family back home just as we were planning to start relaxing.

Before too long, we are past the point where we can realistically continue to work. We have absorbed most of the expenses that could be anticipated and had to put the rest on credit cards. At first, it is fairly easy to make it financially. However, as gasoline costs continue to rise, so do food and other commodities. The Social Security check and/or retirement check simply cannot keep up. Each month, it is harder and harder to absorb the difference.

For many in this age group, there is a sense of shame because we think our parents never got into this situation. Realistically they probably did, but the current generation is far more open to discussions about finances than was the last. After a while, the check will not reach until the end of the month. When that decision is made to stop paying the credit cards, the phone calls begin.

Unlike younger people who can escape to work every day, the retired person has to sit at home and hear that phone ring and ring. Each ring brings a new sense of dread. We have been taught to try to work out our problems, so the retired person finally answers the telephone to see if something can be worked out. The abuse has started. The telephone collector is trained to make the person on the other end of the line feel as though they are worthless. Any good collector knows that all you have to do is get the person to shed tears and they will often start drafting a payment.

It all sounds hopeless, but be assured it is not. Bankruptcy can have a tremendous and positive impact on a retired person’s finances. More importantly, it can have tremendous health benefits. Doctors tell us more and more that stress will ultimately have a negative impact on our lives. When you are elderly, the stress manifests itself even more as a health issue. Many people tell bankruptcy attorneys that they cannot sleep anymore and that is why they must file for bankruptcy. Most people are afraid they will lose something in bankruptcy. In most cases, nothing is lost. A well-trained bankruptcy attorney will let you know, prior to filing, if there is any chance of loss of property. In most cases, all that is lost is debt.

If you or a loved one is facing an overwhelming financial debt situation, consider talking to a bankruptcy attorney PRIOR to depleting the resources that may be needed to sustain the years of retirement. The consultation is free and there may be other options. However, until you sit down with an experienced attorney, you will not know if bankruptcy can help. At least talk to us.