The term “gray bankruptcy” is shorthand for a bankruptcy by someone age 65 or older. Unfortunately, as the U.S. population continues to age, the number of gray bankruptcies likewise continues to increase.
The main cause for this, as a survey conducted by the National Council on Aging shows, is that older Americans have more debt today than ever before.
Gray debt statistics
The NCOA survey revealed the following:
- In 1992, 41.5% of households headed by senior citizens had significant debt.
- By 2010, this percentage stood at 51.9%.
- By 2016, it stood at 60%.
Medical debt
If you fit within this demographic, you know that while inflation continues to push all of your household costs ever higher, your biggest source of debt likely represents your medical costs. Statistics regarding this aspect of gray debt reveal the following:
- 84% of all seniors have one or more chronic illnesses or conditions.
- You likely will incur upwards of $38,000 in out-of-pocket medical costs during your life’s final five years.
- Medical costs make it impossible for 23% of all seniors to make needed home or auto repairs.
- 15% of all seniors cut their prescription medications in half to make them last longer.
- 14% of all seniors regularly skip meals because medical costs deplete their food budgets.
Consumer debt
Overextended credit cards likely represent your second-largest debt problem. Additional statistics show that, by 2016, households headed by seniors owed a median of $68,500 in combined credit card, mortgage and home equity line of credit debt.
If all of this sounds all too familiar to you, you may discover that a gray bankruptcy is your only viable way to rescue yourself from your overwhelming debt.