Bankruptcy is often seen as a last resort for those in dire financial straits. But what if you’re 80 years old, facing over $100,000 in medical debt, and relying solely on Social Security? There are no simple choices, but some decide to simply carry their debt to the end of their lives.

Many people perceive bankruptcy as a fresh start, but it doesn’t always work that way.

In the wake of the pandemic, consumer debt has surged, putting more seniors in financial jeopardy. The Consumer Bankruptcy Project (CBP) has tracked bankruptcy filings for over a decade, revealing that individuals over 65 represent a growing proportion of filers, now around 13%. Their report, “The Graying of U.S. Bankruptcy,” found that the average age of older filers was 70, with some as old as 92, and an average debt exceeding $100,000.

Some filing for bankruptcy say that they owe more than they are making on Social Security. To escape these medical bills, they make the tough choice to file.

The seniors in the study had a median income of $37,000, and their unsecured debt exceeded their annual income. Understanding that they will likely never pay off their debts, these seniors typically file for Chapter 7 bankruptcy, which eliminates debt, rather than Chapter 13, which restructures it.

The main benefit of bankruptcy for seniors is the emotional relief from debt collector harassment. Seeing the bills each month can impart significant stress. However, bankruptcy isn’t a panacea. This age group has limited income opportunities and may end up with more medical bills and credit card debt.

The inability to access credit post-bankruptcy can affect retiree finances. While you might not be in the market to purchase a new home, credit scores can impact your ability to borrow in an emergency and even surprising things like your auto insurance rates. Research indicates that about 30% of seniors were as bad or worse off after bankruptcy due to chronic illness and the inability to work, leading to more debt accumulation.

Bankruptcy is a personal decision that sometimes provides a fresh start. However, many seniors may not realize that the same debts discharged in bankruptcy can also be discharged upon death. Creditors can’t access retirement funds and can only place a lien on a house, but they can’t seize it.

Though this option may seem grim, Chapter 7 is also a last-resort measure. A 2016 Experian report showed that 73% of Americans die in debt, suggesting it might be futile to tackle it aggressively, depending on one’s financial situation.

Of course, we hope that you never face tough choices regarding debt. To avoid bankruptcy or dying with debt, work with a financial advisor to create a retirement plan that secures your financial future.