Higher Education, Income No Guarantee Against Bankruptcy
Consumer bankruptcy filings among college educated, high-income earners is on the rise.
Neither a college education nor high-paying job is enough to protect consumers against filing for personal bankruptcy according to the 2010 Annual Consumer Bankruptcy Demographics Report by the Institute for Financial Literacy, a national nonprofit financial education and counseling organization based.
“The Great Recession has had a dramatic impact on the bankruptcy filings of American consumers across the economic spectrum, including college-educated, high-income earners,” said Leslie E. Linfield, executive director and founder of the Institute for Financial Literacy. “While less-educated, low-income individuals continue to represent the typical bankruptcy filer, this report underscores a sophisticated evolution of the profile of the American debtor that now extends to disparate age, income and ethnic groups.”
Key findings include:
- College education doesn't appear to ward off bankruptcy as the rate of degree holders filing bankruptcy increased by 20%;
- Bankruptcy filers earning incomes above $60,000 increased their rate of filing by more than 66%;
- Asian American filings have doubled while Hispanic/Latino filings increased by more than one-third;
- Americans age 34 and younger decreased the rate of filing bankruptcy by more than 30% since 2006;
- Americans who are married represent more than 60% of all filings; and
- The primary reasons for financial distress include overextension on credit, unexpected expenses, illness/injury, and divorce.
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