For many Americans, retirement was once viewed as a reward for a lifetime of hard work.

You worked for 30 or 40 years, paid off your mortgage, saved for retirement, perhaps earned a pension, and eventually reached the point where you could slow down. Retirement was supposed to be a time to enjoy your golden years—to travel, spend time with family, pursue hobbies, and enjoy the things you had worked so hard to achieve.

Unfortunately, that picture of retirement has changed for many older Americans.

Today, I am seeing more and more people approaching retirement age—or already well into retirement—who are struggling financially. Some are finding that they simply cannot afford to retire. Others have retired only to discover that their savings and retirement income are not enough to keep up with the cost of living.

And for some of these individuals, bankruptcy can provide a fresh start.

The Retirement We Used to Think About

Not that long ago, the typical picture of retirement was fairly straightforward.

A person might have Social Security, a pension, a 401(k), an IRA, or other retirement savings. Their children were grown. Their mortgage was paid off, or nearly so. Their cars were paid for. They had accumulated savings and investments over the years.

Most importantly, they were not carrying large amounts of consumer debt.

That allowed retirees to live within their means and use their retirement years to enjoy life.

Unfortunately, that is no longer the reality for many older Americans.

The Cost of Living Has Changed the Equation

Inflation has affected virtually every part of a household budget.

Groceries cost more. Insurance costs more. Utilities cost more. Property taxes have increased in many areas. Home repairs and maintenance are expensive. Medical and prescription expenses can place additional pressure on a fixed income.

Housing costs have also dramatically changed the retirement equation.

Many people who are now in their 60s, 70s, or even older still have a mortgage. Others have refinanced their homes or taken out home equity lines of credit—commonly called HELOCs—to deal with financial problems.

I have had clients tell me that they used a HELOC to pay off their credit cards, only to find themselves running up the credit cards again because they still could not make ends meet.

They have essentially converted unsecured credit card debt into debt secured by their home.

That can be a dangerous situation.

Credit Cards Can Become a Retirement Trap

When someone is working, it may be possible to deal with an unexpected expense by putting it on a credit card.

When someone is retired and living on a fixed income, however, there may be no additional income coming later to pay that credit card off.

The balances can grow.

A person may use one credit card to pay a utility bill, another to buy groceries, and another to pay for an unexpected home or automobile repair. Eventually, the minimum payments themselves can consume a significant portion of the person’s monthly income.

The problem isn’t necessarily that the person has been irresponsible.

Sometimes, the problem is simply that the numbers no longer work.

Some Older Americans Are Forced to Keep Working

One of the saddest things I see is someone who should be enjoying retirement but finds that they simply cannot afford to stop working.

Unfortunately, working later in life isn’t always easy.

Older workers can have difficulty finding employment, particularly if they have spent most of their careers in a particular profession and are suddenly forced to look for something different.

Some end up working in retail, restaurants, fast-food establishments, coffee shops such as Starbucks, or other service jobs simply to supplement Social Security or retirement income.

There is nothing wrong with working in any of these occupations. The problem is when someone who has spent decades working is forced to continue working simply because they cannot afford their monthly debt payments.

And eventually, age or health may make continued employment impossible.

At that point, the financial problem can become a crisis.

Even Student Loans Can Follow Someone Into Retirement

Another development that surprises many people is the number of older Americans who still have student loan debt.

Some borrowed money for themselves. Others borrowed to help their children or grandchildren attend college.

Regardless of how the debt was incurred, carrying a substantial student loan balance into retirement can make an already difficult financial situation even harder.

Student loans also require special consideration in bankruptcy. They are not automatically treated exactly like credit card debt, and whether they can be discharged depends upon the circumstances and applicable law.

But the fact that someone has student loans does not mean bankruptcy cannot help them with their other debts.

Bankruptcy Can Sometimes Give an Older Person a Fresh Start

This is where bankruptcy can make a tremendous difference.

In an appropriate Chapter 7 bankruptcy case, qualifying unsecured debts—including many credit card debts, medical bills, personal loans, and other unsecured obligations—can potentially be discharged.

For someone living on Social Security, a pension, or limited retirement income, eliminating thousands of dollars of credit card debt can completely change their monthly financial situation.

Imagine someone who is paying $1,000 or $1,500 every month toward credit cards.

If those debts can be eliminated through bankruptcy, that money can instead be used for groceries, utilities, property taxes, automobile expenses, home repairs, or simply enjoying life.

That is a very different retirement.

Bankruptcy Does Not Necessarily Mean Losing Your Home

I frequently speak with older homeowners who are afraid to even discuss bankruptcy because they believe they will automatically lose their house.

That is not how bankruptcy works.

Whether a person can keep their home depends upon a number of factors, including the equity in the property, applicable exemptions, whether mortgage payments are current, and the particular circumstances of the bankruptcy case. Under the Michigan bankruptcy exemptions, debtor’s over age 65 are entitled to claim a higher homestead exemption.

The same is true of automobiles and other property.

Bankruptcy is not simply a process of turning everything you own over to the court.

In many cases, people are able to keep their homes, cars, personal belongings, retirement accounts, and other property while obtaining relief from their unsecured debts.

That is why it is important to have your particular situation evaluated before assuming that bankruptcy is—or is not—an option.

Your Golden Years Should Not Be Spent Paying Credit Cards

If you are in your 60s, 70s, or beyond and find yourself using credit cards every month just to get by, you are not alone.

If you have a mortgage that you never expected to still be paying, a HELOC that has become overwhelming, significant credit card balances, medical bills, personal loans, or other debt, it may be time to look at all of your options.

Bankruptcy is not right for everyone.

But I have represented many people over the years who waited far too long to ask whether bankruptcy could help them. They continued draining their retirement savings, borrowing from family members, taking cash advances, or working jobs they could no longer reasonably continue.

Sometimes, the best financial decision is not finding another way to borrow money.

Sometimes, it is finding a way to eliminate the debt.

You Worked for Your Retirement. You Should Be Able to Enjoy It.

After a lifetime of working, raising families, paying bills, and contributing to the community, people deserve the opportunity to enjoy their retirement years.

If overwhelming debt is standing in the way of that, bankruptcy may be one of the tools available to help.

A consultation does not obligate you to file bankruptcy. It simply gives you an opportunity to understand your options and determine whether there is a better way forward.

If you are retired or approaching retirement and credit card debt has become a burden you cannot escape, I would encourage you to get some advice before using your retirement savings or taking on more debt. You may have more options than you realize.