Debt in Old Age
Recent statistics indicate that it is becoming increasingly common for older individuals to have a fair amount of debt. The statistics are from the Federal Reserve Bank of New York and they compare 2003 and 2015 consumer debt levels (factoring in adjustments for inflation). The statistics show that, for this over-a-decade period, older individuals saw a very different debt trend than younger individuals. For borrowers below the age of 43, the general trend was that debt levels in 2015 were either lower or around equal to the debt levels for 2003. For borrowers 43 years of age and older, however, the general trend was 2015 debt levels being significantly higher than 2003 debt levels.
The statistics also show that the average borrower 65 years of age saw big increases between 2003 and 2015 when it came to mortgage debt (a 47 percent increase) and auto debt (a 29 percent increase).
Why do you think debt has been on the increase among older individuals?
Sometimes, higher debt levels among a given demographic lead to significant increases in debt problems within that demographic. However, it appears that that hasn’t yet occurred with older debtors. Older individuals historically have had fairly strong debt repayment levels, and this has remained the case, so far, during the course of the debt level increase. One wonders though if there might be a tipping point on the horizon, and if we could end up seeing debt struggles becoming a major problem among the elderly population if this trend of increased debt among older individuals continues.
No adult age group is immune to debt problems. So, just like younger consumers, seniors could potentially find themselves in situations where they are considering bankruptcy. Experienced bankruptcy lawyers can help elderly debtors understand how their circumstances, including factors related to their age, could impact whether bankruptcy would be a helpful debt relief route for them.
Source: The Wall Street Journal, “People Over 50 Carrying More Debt Than in the Past,” Josh Zumbrun, Feb. 12, 2016