Older Americans in Bankruptcy--

[Joanne98]

posted by Bob Lawless
Many of us on Credit Slips are part of the Consumer Bankruptcy Project (CBP), a multidisciplinary research initiative. This week, many of you probably saw the press coverage for the first paper published out of the CBP data: Generations of Struggle by Deborah Thorne, Elizabeth Warren, and Teresa A. Sullivan. This paper's reports three key findings. Since 1991--

Americans age 55 or older have experienced the sharpest increase in bankruptcy filings.
Americans age 34 or younger have experienced the greatest decrease in bankruptcy filings.
The influence of Baby Boomers on bankruptcy filings has moderated substantially.
A full copy of the paper is available from the AARP here. The paper shows that older Americans are under greater financial stress than ever before. I am sure we will have more to say about this paper here on Credit Slips.

Because the courts do not collect any basic demographic data about who files bankruptcy, this sort of information would not be available without interdisciplinary research teams like the CBP and the organizations who generously support our research (the AARP, the Robert Wood Johnson Foundation, the Federal Deposit Insurance Corporation, and research funds at the University of Michigan and Harvard University). The data collection for the CBP is complete, and we will keep announcing the availability of new papers here on Credit Slips. What exactly, however, is the CBP?

http://www.creditslips.org/creditslips/2008/06/older-americans.html#more

[Warpy]

1. Ageism and the loss of unions

with seniority rules mean that people 55 and older are simply being shoved out of jobs they are good at because they are not as cost effective as a twentysomething that will need to be trained.

A great deal of this can be explained by simple ageism and the fact that once you've committed the sin of surviving too many birthdays, you are no longer qualified to work a job that pays a living wage.

Older boomers have been hit by this for the past 5 years. Younger boomers who have patted themselves on the back for "staying competitive" are about to find out what we've been talking about.

If you're not out of debt by your 40s, you're sunk.

[izquierdista]

2. Fine balancing act

In order for those at the top to be able to get what they want, those at the bottom must plan very, very carefully. Make sure that they can pay off the student loans, the car loans, and the mortgage before they get too much experience and become too expensive for their employers. With the car and the house paid off and no debts, then they can plan to live frugally until they become eligible for the Social Security jackpot. :sarcasm:

But it's all worth it when you see the smile on a CEO's face when he has the biggest yacht in the marina.

[madmom]

5. Exactly, but more to the point is companies (for sure GM) are forcing

their older "legacy" (their word) employees to retire so they can hire new ones at a lower wage and there are many times when the older ones are not ready to retire, I know of several in my own circle.

[China_cat]

3. Of course the under 34s have the greatest decrease

in bankruptcy filings. They're still living at home with mom and dad. And helping drive their parents into financial ruin.

[whistle]

4. Over 65s most vulnerable to the hidden hyperinflation