Brooklyn Families Face Financial Devastation as Elder Care Costs Force Adult Children into Bankruptcy Crisis

In Brooklyn, one of New York’s most expensive boroughs, a hidden financial crisis is unfolding as adult children struggle to care for aging parents while facing mounting debt that threatens their own financial stability. Brooklyn has the second largest population of adults over the age of 65 out of any county in New York State, yet the needs of the borough’s elders are often overlooked, creating a perfect storm of financial hardship for families caught between generations.

The Staggering Financial Burden of Elder Care

The financial reality of caring for aging parents has reached crisis proportions. As of December 2024, nursing home prices increased 193% while overall inflation increased 100%, representing a nearly tripling of costs for eldercare. This dramatic increase has left many Brooklyn families financially devastated, with one in three family caregivers caught between covering the costs of caring for an aging parent and their own children.

The scope of this crisis is enormous. With an estimated 40 million Americans providing care for older family members, the survey’s results indicate a financial crisis in the making. In Brooklyn specifically, families face additional challenges due to the borough’s high cost of living and limited affordable housing options.

Sixty-two percent of caregivers say that the cost of caring for a parent has impacted their ability to plan for their own financial future. Many are unable to contribute to retirement plans or feel they must dip into their savings early to cover unexpected caregiving costs.

The Hidden Costs Destroying Family Finances

Beyond the obvious expenses of medical care and nursing homes, families face numerous hidden costs that can quickly spiral out of control. Many adult children contribute to expenses for medical care, home health aides, medications, or nursing home fees. Housing costs may increase if parents move in with their children or require home modifications for accessibility.

The financial impact extends far beyond direct care costs. Caregiving responsibilities often lead to reduced work hours, unpaid leave, or even exiting the workforce entirely. This can affect savings, retirement funds, and professional advancement, especially for mid-career individuals.

Real-world examples illustrate the devastating impact. One caregiver paid more than $162,000 out of pocket in 2023 alone to have round-the-clock, at-home care for his bedridden mother, while another caregiver is dipping into her own funds to supplement costs and knows her mother’s long-term care will run out in less than a year.

When Elder Care Leads to Bankruptcy

The financial strain has become so severe that many adult children are being forced to consider bankruptcy as their only option. It is not uncommon for people to dip into their savings in order to pay additional expenses—using their own nest egg dollars to compensate for their lost income and help pay for mom and dad’s costs. This is an ill-advised decision, but some people have no other choice in order to make ends meet during this period of reduced or eliminated income and increased care expenses.

The problem is compounded by the increasing failure of elder care facilities themselves. Nationwide, at least 16 CCRCs have filed for Chapter 11 since March 2020, impacting over 1,000 families and erasing roughly $190 million in entrance fees. When these facilities fail, families not only lose their investments but often must scramble to find alternative care arrangements, adding even more financial pressure.

The current affordability crisis is pressuring younger generations to seek early access to older adults’ wealth. This economic pressure is increasing financial elder abuse within families, threatening seniors’ financial security.

The Sandwich Generation’s Impossible Choice

Brooklyn families are particularly vulnerable as part of the “sandwich generation” – those caring for both children and aging parents simultaneously. Eldercare negatively affects family budgets, labor force participation rates, productivity growth and overall economic growth. This is especially the case for those in the “sandwich generation,” who take care of children as well as aging parents.

Around 1 in 7 Americans (14%) currently assist their parents financially and another 41% plan to do so if their parents need it. More than 1 in 5 millennials (22%) — many of whom are likely the children of baby boomers, who may be at or close to retirement age — are currently assisting their parents financially.

The emotional toll compounds the financial burden. Adult children often experience discomfort as they transition from being cared for to being the caregivers. The sense of becoming the “parent” to one’s parents can be emotionally challenging and may trigger feelings of sadness or frustration.

Legal Solutions and Bankruptcy Protection

When families reach the breaking point financially, bankruptcy may provide the legal protection needed to reorganize debts and preserve essential assets. For Brooklyn families facing overwhelming elder care costs, consulting with an experienced Brooklyn bankruptcy lawyer can provide crucial guidance on available options and protections under federal bankruptcy law.

Many senior citizens and elderly persons with limited incomes fall within the median income limits for Chapter 7 bankruptcy, which can provide a fresh start by discharging unsecured debts like credit cards and medical bills that often accumulate during caregiving periods.

Chapter 13 bankruptcy can also provide valuable relief by allowing families to reorganize debts into manageable payment plans while protecting essential assets like the family home. This can be particularly important for Brooklyn families who have taken on significant debt to care for aging parents.

Planning Ahead to Avoid Financial Catastrophe

The key to avoiding financial disaster lies in early planning and honest family discussions about care needs and financial resources. Adult children should have a frank discussion with their parents about their long-term living situation and their potential care needs down the road.

Families should also explore available resources before exhausting their own finances. Options include finding out if there is a long-term care insurance policy, which may provide financial assistance for certain care services, and checking to see if there are any government programs that your parent is eligible for, such as Medicaid, veteran’s, or disability benefits.

The Growing Crisis Demands Action

The Wall Street Journal in 2024 quoted a representative from an online community of caregivers who said, “The new inheritance is not having enough money to give to kids but to have enough money to cover long-term care costs”. This stark reality reflects how the elder care crisis has fundamentally changed family financial planning.

Brooklyn families facing this crisis should not suffer in silence. Professional legal guidance can help navigate the complex intersection of elder care costs and debt relief options. Whether through strategic financial planning, debt reorganization, or bankruptcy protection when necessary, there are legal tools available to help families weather this unprecedented financial storm while still providing the care their loved ones deserve.

The elder care bankruptcy crisis in Brooklyn represents a fundamental challenge to family financial security in 2024. As costs continue to rise and resources remain limited, families must take proactive steps to protect themselves while ensuring their aging parents receive the care they need. With proper legal guidance and strategic planning, it’s possible to navigate this crisis while preserving both family relationships and financial stability.