According to a recent study published in the American Bankruptcy Institute's ABI Journal, "baby boomers are disproportionately represented in bankruptcy proceedings." The study indicates that in 2007, 42 percent of all individuals filing for bankruptcy were between the ages of 42 and 64. Older Americans are also filing at a much faster rate than younger adults, says the study.
The Study Findings
The study authors, statistician John Golmant and social science analyst James Woods, both of the Administrative Office of the United States Courts, say those 55 to 64 years old are experiencing the fastest rate of increase in filings. From 2002 to 2007, bankruptcy filings in that age group increased by 65 percent. In contrast, the group with the greatest decrease in filings was those aged 25 and younger. These Americans saw a drop in filings of 60 percent in that same span.
The trend may continue as far back as 1994, when older Americans accounted for seven percent of all individual filings. In 2007, the same group constituted 15.2 percent of individual filings.
The study blames, at least in part, the recent housing crisis for the uptick in filings by boomers. People over the age of 50 were often targeted during the refinancing boom as home prices were falling, and many were left with little or no home equity, the study says.
Aside from the housing collapse, credit card debt and mounting health care bills for aging Americans also contributed to the increase in filings. Moreover, older workers may have more difficulty finding employment than younger employers; according to the United State Department of Labor's Employment and Training Administration, older workers both take longer to find jobs than younger workers and usually must accept lower pay once they find a job. These workers may have skills that are obsolete or non-transferable.
At any age, those facing mounting debt and contemplating filing for protection should seek counsel from a lawyer regarding a fresh start in bankruptcy or bankruptcy alternatives.
