Economic downturn slams older Ohioans

Retirees need $200,000 in savings just for medical expenses, a sociology professor says.

COLUMBUS (AP) — Older Ohio residents are increasingly suffering from economic troubles, part of a growing national trend that is compounded by medical bills and the mortgage crisis.

The number of people over age 55 who file bankruptcy has doubled since 1991, according to an AARP and the Robert Wood Johnson Foundation study. In 1991, 8 percent of all those who filed were 55 or older; in 2007, that number jumped to 22 percent.

“They are the most vulnerable group, and as the economy gets worse, they get slammed,” said Deborah Thorne, an Ohio University sociology professor and the study’s lead author.

Janet and Benjamin Thompson were part of the problem. Their adjustable-rate mortgage was about to go up for the second time — this time another $350 a month — so the Baltimore, Ohio, couple declared bankruptcy in 2007 in the face of credit card debt and rising medical expenses.

“It got to the point where there was nothing else to do,” said Janet Thompson, 62. “We had to start over.”

Through the first six months of this year, bankruptcy filings are up 17 percent from the same period last year, according to the U.S. Bankruptcy Court for the Southern District of Ohio.

Experts blame credit card debt and risky mortgages.

“Often older people are more trusting and gullible and are more likely to be taken advantage of by the credit-card industry,” Thorne said. “They don’t understand late fees and fines and how their interest rates can jump up.”

Making matters worse are retirees who didn’t save enough money for rough economic times.

“Seniors are definitely hurt the most,” said Scott Needleman, a Columbus attorney who has filed bankruptcy papers for scores of seniors. “With their care needs, medical situations, being on fixed incomes, being hooked into rotten refinancing deals, gas up to $4 a gallon, they’re being crushed.”

Thorne said the average retiree needs $200,000 in savings just for medical expenses, and “for most people, that’s not happening.”

At the Columbus office of Consumer Credit Counseling Service, a quarter of those seeking help are over 56.

“This is the first generation to retire who aren’t adverse to debt, and now they’re retiring with mortgage debt, credit-card debt, something our parents and grandparents wouldn’t do,” said Bill Staler, of Consumer Credit Counseling.

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He said the faces considering bankruptcy are changing.

“I’m seeing single women who are 80 and their husbands died,” Staler said. “It’s absolutely the saddest thing I’ve ever seen.”