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90% Of All Americans Over 60 File For Bankruptcy

Started by EvadingGrid, Oct 22, 2018, 04:38:17 AM

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New York Times

90% Of All Americans Over 60 File For Bankruptcy

'For a rapidly growing share of older Americans, traditional ideas about life in retirement are being upended by a dismal reality: bankruptcy.

The signs of potential trouble — vanishing pensions, soaring medical expenses, inadequate savings — have been building for years. Now, new research sheds light on the scope of the problem: The rate of people 65 and older filing for bankruptcy is three times what it was in 1991, the study found, and the same group accounts for a far greater share of all filers.

Driving the surge, the study suggests, is a three-decade shift of financial risk from government and employers to individuals, who are bearing an ever-greater responsibility for their own financial well-being as the social safety net shrinks.

The transfer has come in the form of, among other things, longer waits for full Social Security benefits, the replacement of employer-provided pensions with 401(k) savings plans and more out-of-pocket spending on health care. Declining incomes, whether in retirement or leading up to it, compound the challenge. Spam_A Spam_B Cheryl Mcleod of Las Vegas filed for bankruptcy in January after struggling to keep up with her mortgage payments and other expenses. "I am 70, and I am working for less money than I ever did in my life," she said. "This life stuff happens."

As the study, from the Consumer Bankruptcy Project, explains, older people whose finances are precarious have few places to turn. "When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give," the study says, "and older Americans turn to what little is left of the social safety net — bankruptcy court."

"You can manage O.K. until there is a little stumble," said Deborah Thorne, an associate professor of sociology at the University of Idaho and an author of the study. "It doesn't even take a big thing."'

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Last Edit by Humphrey


This commentary seems timely.

FICO Gets Creative With Credit Scores to Facilitate Getting More Americans in Debt


Normally, I would relegate this item to a snarky long comment in Links, but this development is sufficiently appalling, while being perversely predictable, so as to merit special attention. From the Wall Street Journal:

Fair Isaac Corp. creator of the widely used FICO credit score, plans to roll out a new scoring system in early 2019 that factors in how consumers manage the cash in their checking, savings and money-market accounts. It is among the biggest shifts for credit reporting and the FICO scoring system, the bedrock of most consumer-lending decisions in the U.S. since the 1990s.

The UltraFICO Score, as it is called, isn't meant to weed out applicants. Rather, it is designed to boost the number of approvals for credit cards, personal loans and other debt by taking into account a borrower's history of cash transactions, which could indicate how likely they are to repay....

This is occurring at the same time the consumer-credit market appears relatively healthy. Unemployment is low and consumer loan balances—including for credit cards, auto loans and personal loans—are at record highs, and lenders are looking for ways to keep expanding loan volume.

Before we go further, you need to understand what this is about. Banks sell a substantial majority of the consumer loans their originate, typically via securitization. Investors use FICO heavily in evaluating these risks. So the FICO move is to enable banks to make more consumer loans by putting its Good Housekeeping Seal of Approval on them so banks can hawk them to investors.

More at the link --->  https://www.nakedcapitalism.com/2018/10/fico-gets-creative-with-credit-scores-to-facilitate-getting-more-americans-in-debt.html

Last Edit by Humphrey


This situation is absolutely disgusting to me.

I would not be able to support myself if I were living in the USA under theses conditions.

As it stands,
I live with a safety net that prevents me from crashing.

I may not own a house, but I can pay my rent every month so far.

I have medical insurance that guarantees my medications and any treatment that I need
until I die from terminal cancer sometime in the not so far away future.

If I were living in the land of my birth,
I would be lucky to find a safe place in a cardboard box or
better yet
under a bridge in a warm part of the country.
After all, winter is coming.

How much suffering do the American people have to endure before they all rise up together and say "ENOUGH!" ?

And then do something about it to remedy the abuses that the government is dumping on them ?

Last Edit by Humphrey