Medical Debt and Bankruptcy Among Older Adults

Medical debt can affect anyone, but it can become a more common burden among older adults who tend to have more significant health problems that require costly and ongoing care. Indeed, according to data from the Kaiser Family Foundation, “people typically use more health care often have higher health care expenses and out-of-pocket costs as they age.” Notably, the older a person is, the more likely they are to require expensive medical care that results in medical debt, yet the total amount of medical debt decreases in general once adults reach the age at which they are eligible for Medicare (age 65). Accordingly, adults in their early 60s tend to be the people with the highest amount of medical debt, although income and race also tend to be predictive factors.

If you have medical debt and are in an older age group, or if you have a parent in this situation, should you be thinking about bankruptcy? Our West Palm Beach bankruptcy attorneys can provide you with some important tips to consider.

Consider Your Retirement Age in Relation to Your Debt 

If you are nearing retirement age but not yet there, before you take steps to file for bankruptcy, it is important to consider your retirement age and current income (in other words, how many years of wages or salary you have left before retiring) and the total amount of your medical debt. Is your medical debt and any other combined debt of an amount that you would be able to pay it off over time if you filed for Chapter 13 bankruptcy? Or, if your only debt is medical debt, are there options for negotiating a workable payment plan if you are still intending to work for at least several more years?

You should discuss some of these issues with a bankruptcy lawyer to determine whether bankruptcy is the best decision for you and, if so, the type of bankruptcy that is most appropriate.

Consider Your Exempt Assets 

It is important to be aware that, in retirement, there is a difference between assets that are judgment proof (i.e., those that a creditor cannot take by suing you) and those that are exempt in a bankruptcy case. In many circumstances, Florida’s bankruptcy exemptions allow a person in retirement to exempt nearly all of their assets, including the full amount of equity in their home, which can be a reason to consider filing. At the same time, many assets in retirement cannot be taken by creditors (such as Social Security benefits), so going through a bankruptcy case might not provide any more benefits. A lawyer can assess your financial circumstances and help you to determine the best course of action based on your needs.

Contact a West Palm Beach Bankruptcy Attorney Today 

Dealing with medical debt as you get older, and even during retirement, can be overwhelming. For many older adults with medical debt, the debt feels insurmountable. In order to determine whether a bankruptcy filing is likely to be a good option for you based on your individual circumstances, it is important to seek advice from an experienced West Palm Beach bankruptcy lawyer at Kelley Kaplan & Eller, PLLC as soon as you can. Contact us today for more information.

Sources:

law.cornell.edu/uscode/text/11

healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/#:~:text=However%2C%20the%20share%20of%20adults,those%20ages%2065%20to%2079

law.cornell.edu/wex/judgment-proof#:~:text=A%20person%20may%20be%20considered,used%20to%20satisfy%20a%20judgment