ST. AUGUSTINE — First came the health problems. Then, unable to work, Ada Noda watched the bills pile up. And then, suffocating in debt, the 80-year-old did something she never thought she would be forced to do.
She declared bankruptcy.
While the bankruptcy filing rate for those younger than 55 has fallen, it has soared for older Americans, according to a new analysis from the Consumer Bankruptcy Project, which examined a sampling of noncommercial bankruptcies filed from 1991 to 2007.
The older the age group, the worse it got — people 65 and older became more than twice as likely to file during that period, and the filing rate for those 75 and older more than quadrupled.
"Older Americans are hit by a one-two punch of jobs and medical problems and the two are often intertwined," said Elizabeth Warren, a Harvard Law School professor who was one of the authors of the study. "They discover that they must work to keep some form of economic balance and when they can't, they're lost."
That's precisely what happened to Noda. She worked all her life on a hospital's housekeeping staff and later selling boat tickets to tourists. She cut corners when she needed to but always paid the bills she neatly logged in a ledger.
"I was born during the Depression," she said. "I paid the bills whether I ate or didn't, whether I went to the doctor or not."
It all worked fine for Noda, a widow for 23 years, until she was forced to undergo double-bypass surgery and deal with respiratory problems. She started using two credit cards more frequently for food and bills. Before long, she was $8,000 in debt and behind on car payments.
"I'd go to bed and all I had on my mind was bankruptcy," she said. "I had nothing left."
Noda's car was repossessed, but her mobile home wasn't in jeopardy because her daughter owns it. While she's covered by Medicare and receives $968 in Social Security each month, she relied on her job for other expenses. She had no choice but to get help from Jacksonville Legal Aid and declare bankruptcy.
Most bankruptcies are still filed by people far younger than Noda, but the percentage the younger filers make up has fallen during the 16-year period, according to the Consumer Bankruptcy Project analysis, which will be published in the Harvard Law and Policy Review in January. The study looked at more than 6,000 cases filed in 1991, 2001 or 2007.
Each age group younger than 55 saw double-digit percentage drops in their bankruptcy filing rates over the survey period, while older Americans saw remarkable increases.
A number of factors are contributing to the increase. Higher prices for ordinary consumer goods have hit seniors on fixed budgets. For older Americans living below the poverty level, or not far above, a safety net likely doesn't exist for economic setbacks such as medical problems. And some fall prey to scams that cripple their finances.
Warren noted increasing numbers of Americans are entering their retirement years with significant debt and are still paying off mortgages. She said it was wrong to assume that lives of luxury are bankrupting seniors; rather, they're incurring debts to meet needs such as medical treatment.
"There's no evidence that the problem is consumerism," the professor said.
Nor is there a significant aging trend to blame. While the country is set to experience a notable age shift in the coming years, no major one took place between 1991, when the average age was 33, and 2007, when it was 36.
8 percent
The 1991 number of those 55 and older filing for bankruptcy. 22 percent
The corresponding number for 2007. +40 percent
The filing rate per thousand people age 55-64 from the same period. +125 percent
The filing rate for those 65 to 74 years old. +433 percent
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