Anita Gloyeski has filed or overseen thousands of bankruptcy cases since she began handling them in 2002.
In recent years, the attorney began noticing a pattern among some of the people who arrived at her offices in Fort Wayne and five other Indiana cities. Many of those showing up with questions about federal bankruptcy protection were of retirement age.
She's not alone, according to new research that shows bankruptcy filings for people age 65 and older are increasing.
The rate at which seniors file for bankruptcy tripled from 1991 to 2016, a study by the Consumer Bankruptcy Project found. Data show 1.2 filers per 1,000 people in 1991 were between the ages of 65 and 74; in 2016, the number was 3.6.
Filers in that age range now make up a larger portion of those who file for bankruptcy, researchers said. In 2016, 12.2 percent of filers were over 65, compared with just 2.1 percent in 1991.
That is a nearly 500 percent jump in just 25 years.
The reasons older people are increasingly looking to bankruptcy include rising medical costs, a shrinking social safety net and a shift from pensions provided by employers to private retirement savings plans, according to the report titled “Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society.”
“For an increasing number of older Americans, their golden years are fraught with financial risks, the result of which is often bankruptcy,” researchers wrote.
It is difficult to determine whether the trend highlighted by the Consumer Bankruptcy Project is mirrored in northeast Indiana. Bankruptcy filings do not include filers' ages, and researchers relied on questionnaires to gather their data.
But Gloyeski and people who work to find assistance for older people say they continue to hear from debt-ridden seniors and their families.
Sylvia Wade, a community program specialist at Aging and In-Home Services of Northeast Indiana, has worked for nearly 20 years to provide older people access to programs to help them pay medical bills and other expenses.
She met recently with the adult children of a man in his 80s who had more than $100,000 in debt – exceeding the value of his house – because he used credit cards to cover medical expenses. The man's children had just found out and didn't know where to turn.
They were referred to lawyers who offer free legal help to low-income clients.
“Through the years, I've spoken to individuals about the need to file bankruptcy and not having resources or not being able to pay bills,” Wade said. “Sometimes they break down and cry. There's some embarrassment.”
The bankruptcy project is run by professors Deborah Thorne of the University of Idaho, Robert Lawless of the University of Illinois, Katherine Porter of the University of California-Irvine and Pamela Foohey, an Indiana University law professor who specializes in bankruptcies.
Over four years, the group gathered bankruptcy paperwork from around the country and sent questionnaires to hundreds of filers. The surveys asked their ages and about what led them to file.
Responses from older filers ranged from inadequate savings and a drop in income to the high cost of medical care, which was among the most common answers. Coverage gaps and requirements from Medicare that patients shoulder some costs contribute to debt held by older people, an author of the study said.
That is supported by other research showing that older patients are spending more income on medical bills. A report from the Kaiser Family Foundation said the average Medicare recipient's out-of-pocket spending on health care was 41 percent of their Social Security payment.
Foohey said in a telephone interview last week that researchers were surprised at the jump in bankruptcy filings by people age 65 or older.
“We actually thought there might be a mistake,” she said, “but there wasn't. The answers to these questions (in the surveys) fit in with a broad set of research.”
The Fort Wayne division of U.S. Bankruptcy Court had 2,500 bankruptcy filings in 2016, the last year for which data are available. That was down from nearly 6,000 in 2009, but it is not clear how many of those are from older people.
Bankruptcy is designed to allow filers to start anew and regain more secure financial footing. But the report states that, for older people, it's often “too little too late.”
“By the time they file, their wealth has vanished and they simply do not have enough years to get back on their feet,” according to the report.
That's why Gloyeski, who works out of her offices in Warsaw and Kokomo, often advises older clients to avoid filing for bankruptcy. They sometimes have little property to liquidate to pay creditors, she said, and in some situations their income can't be garnisheed.
“I try to get them to save their pennies,” Gloyeski said.
She said creditors typically give up after learning they will not be able to collect.
Foohey said filers might have other reasons to seek bankruptcy protection.
“Among them are financial and emotional,” she said in an email. “It may not make sense financially for some older Americans to file because they do not own property that their creditors can seize or garnishee.
“But the stress of being hounded by debt collectors itself may be a legitimate reason to file. Bankruptcy comes with a stay of creditors' debt collection activities, including debt collection calls.”
Wade said many of the people she sees at Aging and In-Home Services often don't talk about their financial problems, citing the example of the man who used credit cards for medical payments.
“Parents don't have those types of conversations with their children,” she said. “That's not an easy conversation to have, especially if you've worked all your life and now you're in a different situation.
“They've done everything right. We all expect to live healthy and long – (we're) one major medical condition, one car accident from some very difficult choices.”