Not so long ago, businesses had responsibilities toward employees that existed well into retirement. Workers would often stay with the same company their entire adult life and retire with a pension, sponsored both by an employer and by current employees at the company. Unfortunately, modern capitalism has effectively done away with the vast majority of pension programs.

Combine that with a diminishing pool of workers contributing to Social Security, and you have a lot of financial strain for older adults in the United States. Health insurance has also changed, with many employer-sponsored retirement plans now cutting back on the benefits they offer or creating more difficult requirements for potential enrollees.

Research shows that bankruptcy rates among adults between the ages of 65 and 74 tripled between 1991 and 2013. Even those who took great care to plan for their financial future may find that they can no longer afford the necessities of life, leaving them vulnerable to debt collection and financial woes.

Soaring medical costs and less coverage mean major medical debt

The health issues that confront older Americans don’t just impact their quality of life. They also have a drastic effect on the financial reality of many older adults. Issues like progressive diseases, ranging from Alzheimer’s disease to cancer, as well as the need for prescription medication for daily health maintenance, can result in exorbitant medical costs.

Even with a health insurance plan, many retired Americans find themselves left with an increasing financial responsibility to cover their own medical care. Combine massive medical expenses with a fixed income, and you have the perfect recipe for a personal debt crisis. Medical debts are one reason that more older adults are turning to bankruptcy during their retirement.

Living on credit can only get you so far

For several generations, adults in the United States have learned the lesson that when you can’t afford something, you can always buy it on credit. The availability of credit can help people make ends meet during months with low income or in difficult situations, such as when someone changes jobs.

Unfortunately, living on credit means developing massive debt that comes with a huge interest rate. Many older Americans may find themselves using credit cards for monthly necessities, such as food and utility bills. Those expenses aren’t likely to go away, which means that each month there will be less available credit and a higher balance to pay off.

For older Americans confronted with inadequate savings, low income or major debt, bankruptcy relief maybe the best option. Modern bankruptcy can help adults take care of unsecured debts, which include medical bills and credit cards. If you cannot budget your money to cover all of your costs, it may be time to look at whether bankruptcy can help you manage your finances during the rest of your retirement.