Bankruptcy Rates Rise Among Older Americans

[Purveyor]

WASHINGTON, June 17 --With more than a million people filing for bankruptcy in 2007, a new study by Elizabeth Warren, a Leo Gottlieb Professor of Law at the Harvard Law School who compiled the study for AARP's Public Policy Institute (PPI), shows that the rate of bankruptcy filings among those 65 and older has more than doubled since 1991.

While the bulk of bankruptcy filers are in their 30s and 40s, the financial landscape for the oldest and youngest generations has changed considerably. Americans age 55 or older have experienced the sharpest increase in bankruptcy filings, jumping from 8.2% of debtors in 1991 to 22.3% in 2007. Those ages 34 or younger experienced the greatest decrease in bankruptcy filings, comprising nearly half (45.5%) in 1991 to just over a quarter (26.1%) in 2007 of all bankrupt debtors.

"Lower bankruptcy filing rates for younger people may be the result of healthier finances," suggests Warren. "However, young people may be juggling debt longer before they take more extreme measures. If that is the case, we can expect to see more bankruptcies on the horizon as Generations X and Y grow older. Our culture has normalized debt. Now, individuals nearing or in retirement are realizing how difficult it can be to manage that debt as they age."

Research found that by 2007, the median age for bankruptcy filers had increased to 43 years old in 2007 from 36.5 years old in 1991. A declining economy, increasing healthcare costs, and a general lack of retirement preparedness puts older Americans and their families at greater risk for bankruptcy and continued financial stress.

"This study is cause for concern," said Susan Reinhard, Senior Vice President of AARP's Public Policy Institute. "It indicates that financial security is progressively eroding for many older Americans. We are exploring why this is happening and what can be done to prevent it."

Undoubtedly, the 2005 amendments to bankruptcy law -- which changed what filing for bankruptcy looked like for Americans -- curtailed filings early on and hold deep ramifications for the individual and research. While it is possible that changes to the law impacted various generations differently, bankruptcy's rising rates among the older population reflects the increasing financial stress that so many Americans are feeling today.

PRNEWSWIRE: http://www.sunherald.com/prnewswire/story/631111.html

[islandmkl]

1. how's that reagan (and the last 28 years of maintainers) 'trickle-down' shit...

working for y'all, now??

Reagan-Bush-Clinton-Bush.....what ever really changed??

[saigon68]

6. Thank Joe Biden the Senator from MBNA when you go Banko

A woman whose only debt is from her husbands last illness and the hospital is taking away her house is now FORCED to attend a course on financial responsibility thanks to Joe

Thanks--- Joe

[Mountainman]

2. Here's a question to ask. If you are being paid just enough to cover necessities how do you save

for retirement? I'll bet with the increase in gas prices and food less is going into retirement savings.

MSM says we aren't saving enough for retirement but not that we don't make enough money to live on.

[Warpy]

3. The last article I read about how to save enough for retirement

said that I needed to save $2000/year starting when I was 20.

The problem is that I didn't make $2000/year after taxes when I was 20.

In order to save enough to retire on, I'd have had to work two full time jobs for my whole working life, one to live on and the other to save.

[antigop]

5. And the Repugs would say,"Where do people get this idea that they are entitled to retirement?"

Remember when Bush said to the woman who was working three jobs, "You work three jobs-- how uniquely American."

[Frustratedlady]

4. I can imagine several scenarios with this age group.

There are many who have been laid off permanently and, after a period of unemployment, lost their health insurance and could no longer afford coverage. At the same time, they are under stress, become ill and need hospitalization for themselves or their family. They are too young for Medicare and too old to be hired/absorbed by another company. It's a bad age group.

It is also a time when their children are going to college, need help or must continue to live at home. That's not cheap, either.

If they are laid off permanently, they may find that their retirement package disappeared.

They are already locked into a certain lifestyle and struggle to continue at that level, but learn it isn't possible.