Home » Law and Legal Articles » New Bankruptcy Study Reveals Increase in Filings by College Grads
New Bankruptcy Study Reveals Increase in Filings by College Grads
Bankruptcy among the educated and middle class is on the rise, a new study finds.
October 13, 2011 /Law and Legal PR News/ -- The Institute for Financial Literacy, a financial education and support organization based in Maine, has come out with its 2010 Annual Consumer Bankruptcy Demographics Report. It found that bankruptcy filers are increasingly educated and in the middle class.
The study looked at data collected from 200,000 people who filed for bankruptcy between 2006 and 2010. It asked participants a series of questions about their level of income, education, gender, employment status, marital status and reasons for filing for bankruptcy.
The Institute found that the rate at which those with a bachelor's degree filed for bankruptcy increased 21 percent over the five-year period and accounted for almost 14 percent of all filings during that time. During the same period, the percentage of filings by those with only a high school or equivalent education decreased and the percentage of filings by those with only some college education stayed stagnant.
The results of the study follow the positive trend of increased bankruptcy filings among the educated and middle class. Bankruptcy attorneys have witnessed an increase in middle class filers more recently, whereas filers at the onset of the recession tended to be lower income individuals with little assets.
The Institute's study also revealed the most popular reasons why people filed for bankruptcy. Prior to the recession, many college-educated persons believed that taking out enormous amounts of student debt would pay off in higher income once they were out of school, but America's current economic state has dashed those hopes for many. The majority of people who filed between 2006 and 2010 made $40,000 or less, but there was an increase in filings by people who make $60,000 or more. Almost a quarter of participants reported that either a lower income or job loss accounted for their decision to file bankruptcy.
In 2010, the three most popular reasons for bankruptcy included being "overextended on credit," with 70.5 percent of responders reporting, "reduction of income," with almost 65 percent reporting and "unexpected expenses," with 56.62 percent reporting.
The Institute's data shows that the financial toll of the worst recession since World War II continues to take on Americans. The Great Recession has cost workers their income and sometimes their jobs, making it more difficult to make ends meet, even if someone has a four-year degree. If you or a loved one are considering filing for bankruptcy, be sure to seek the advice of an experienced bankruptcy attorney.
Article provided by Debt Advisors, S.C.
Visit us at www.mydebtadvisors.com
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