The Hidden Financial Crisis: How Nassau County’s Soaring Eldercare Costs Are Pushing Seniors Into Bankruptcy
Nassau County seniors are facing an unprecedented financial crisis as long-term care expenses continue to outpace income and savings, leading to a dramatic surge in bankruptcy filings among older adults. A rising number of older Americans are filing for bankruptcy, since long term care costs are one of the leading factors of rising costs in older ages. The rate for seniors aged 65 and over, filing for bankruptcy has more than doubled since 1991, according to researchers.
The Scope of Nassau County’s Senior Population
The Nassau County Department of Senior Citizen Affairs is responsible for advising the County Executive and government officials on the problems and needs of the County’s 257,000 residents age 60 and over. This substantial population faces increasingly challenging financial pressures as healthcare costs continue to rise while retirement benefits decline.
The percentage of elders in the bankruptcy system has also quintupled. Seniors say that the rising cost of health care is a leading reason why they are forced to consider filing for bankruptcy. The financial disparity is stark: The median bankruptcy filer reported a negative wealth of higher than $17000. Non-bankrupt counterparts, on the other hand, had around $250,000.
Long-Term Care Industry in Financial Distress
The eldercare industry itself is experiencing significant financial turmoil, which directly impacts care quality and availability for Nassau County residents. Healthcare bankruptcies reached their second-highest levels in six years in 2024, with senior living and care accounting for almost a fourth of those filings, according to a report published Thursday by healthcare restructuring advisory firm Gibbins Advisors. Of the 57 filings in 2024, 11 were in long-term care, or 23.1%, compared with 15 in 2023, 12 in 2022 and 13 in 2021, according to the report.
The Health Care Index reached the highest level of distress in the report’s history for the fifth consecutive quarter, according to the Second Quarter 2024 Chapter 11, Healthcare and Real Estate Distress Indices report. Data show that the current level of chapter 11 filings is almost 50% higher than health care distress at the height of the Great Recession in 2008-2009.
The Financial Burden on Families
As the population ages and healthcare costs continue to rise, many individuals and families face overwhelming debt related to long-term care costs. Whether for a loved one or yourself, the expenses associated with nursing homes, assisted living facilities, and in-home care can quickly deplete savings and lead to significant financial strain.
Nassau County families are particularly vulnerable because More seniors are covered by low paying Medicaid and more seniors are less likely to pay their own bills. Many companies are phasing out retirement plans, which has corresponded with the significant drop in retirement benefits across the country, putting the elderly at risk.
Bankruptcy as a Solution for Eldercare Debt
For those unable to manage these costs, bankruptcy can provide a viable solution to address debt and regain financial stability. When Nassau County seniors face overwhelming long-term care expenses, bankruptcy can offer several forms of relief:
- Unsecured debts, such as credit card balances, personal loans, and medical bills, can often be discharged in bankruptcy. For example, if you’ve relied on credit cards or loans to cover nursing home or assisted living expenses, filing for Chapter 7 bankruptcy can eliminate these debts entirely.
- If you have significant income or assets you want to protect, Chapter 13 bankruptcy may be a better option. Chapter 13 allows you to reorganize debts into a manageable repayment plan that lasts three to five years.
For Nassau County residents considering this option, consulting with a qualified Bankruptcy Attorney Nassau County can provide essential guidance through this complex process. The right legal representation can help protect assets while addressing overwhelming eldercare-related debt.
Asset Protection During Bankruptcy
Bankruptcy laws include exemptions that protect essential assets from creditors. These exemptions vary by state but often cover: Retirement Accounts: Funds in 401(k)s, IRAs, and pensions are typically protected. Home Equity: Many states have homestead exemptions that protect a portion of the equity in your primary residence. Personal Property: Items such as clothing, furniture, and necessary vehicles are often exempt. These protections are particularly important for individuals facing long-term care costs, as they help preserve the financial resources needed to maintain a basic standard of living.
Challenges and Considerations
While bankruptcy can provide relief, Nassau County seniors should be aware of potential complications: Certain debts, such as unpaid child support, alimony, and some taxes, are not dischargeable in bankruptcy. Similarly, Medicaid liens may remain enforceable after bankruptcy, depending on the circumstances.
Some nursing homes may place liens on a debtor’s property for unpaid bills. These secured debts may complicate the bankruptcy process, requiring additional legal guidance to resolve.
Alternative Solutions
Before filing for bankruptcy, Nassau County seniors should explore other options: Negotiate with Care Providers: Nursing homes and assisted living facilities may be willing to negotiate payment plans or reduce the amount owed. Medicaid Planning: Consult with an elder law attorney to explore strategies for qualifying for Medicaid, such as spending down assets or establishing a Medicaid trust. Reverse Mortgages: For homeowners, a reverse mortgage can provide funds to pay for long-term care expenses without selling the home.
Looking Ahead
The crisis facing Nassau County seniors is expected to continue as healthcare costs rise and the senior population grows. Bankruptcy filings in the health care industry numbered 79 cases in 2023 and 57 in 2024, after averaging 42 bankruptcy filings each year from 2019 through 2022, according to Gibbins Advisors. Senior care companies accounted for a significant portion of those bankruptcies, with 15 firms filing in 2023 and another 11 filing in 2024. Operators of long-term care facilities can expect an increase in bankruptcy filings in 2025, with 16 projected for the year by Gibbins, after eight companies filed for bankruptcy protection in the first half of the year, Senior Housing News reported.
For Nassau County families facing these challenges, understanding all available options—including bankruptcy protection—is crucial for navigating this difficult financial landscape. Professional legal guidance can help ensure that seniors and their families make informed decisions that protect their financial future while securing necessary care.