Who's Filing for Bankruptcy?

College Graduates Filing Bankruptcy at Higher Rate

A report by the Institute for Financial Literacy, finds that college graduates and people with advanced degrees are filing more often.  In fact, since the passage of the Bankruptcy Abuse Prevention and Protection Act, holders of higher education degrees have increased their filings by about 20 percent.

Despite the rise in filers with advanced degrees, over 70% of debtors have not graduated from college.  Although the majority of bankruptcy filers earn less than $40,000 a year, the filers earning incomes above $60,000 increased their rate of filing by over 66%.

The recession seems to be a big drive toward the increase in filings.  Debtors reporting a reduction of income increased by 24% while those citing job loss as a cause of financial distress increased by 21% since 2006.  Other common causes of financial distress reported by Americans include being over-extended on credit, an unexpected illness or injury and divorce.

One interesting point is that bankruptcy filings are down 30 percent among people 34 years old and younger.  This demographic includes recent college graduates; a big reason for this is that student loans are nearly impossible to discharge.  This may be a sign that younger people facing the reality of paying for education and a tightening of credit lines for younger Americans is forcing them to live within their means.

Are you considering filing for Ch.7 or Ch.13 protection? Contact me, the Ohio Bankruptcy Attorney, David Smith for a free in-office or telephone consultation today at (937)-318-1529.  Student loan debt is difficult to discharge, but the rest of your debt is not.  Let me help you gain your fresh start for a new tomorrow!