Consumer Bankruptcy Filings among College Educated,
High Income Earners on the Increase
South Portland, ME - Sept. 13, 2011 - Neither a college education or high paying job is enough to protect consumers against filing for personal bankruptcy according to the 2010 Annual Consumer Bankruptcy Demographics Report released by the Institute for Financial Literacy, a national nonprofit financial education and counseling organization based in Maine.
"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."
The Center for Consumer Financial Research™, an independent division of the Institute for Financial Literacy, collected information on gender, age, ethnicity and other factors over a five-year period from nearly 200,000 consumers seeking pre-bankruptcy credit counseling or post-bankruptcy debtor education courses throughout the United States. The Institute for Financial Literacy has published a Consumer Bankruptcy Demographics Report annually since 2005. The 2010 report provides a five year perspective of the American debtor.
Key demographic 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 over 66%;
- Asian American filings have doubled while Hispanic/Latino filings increased by over 33%;
- Americans age 34 and younger decreased the rate of filing bankruptcy by over 30% since 2006;
- The Gender Gap in bankruptcy filings is closing;
- Americans who are married are more likely to file and represent over 60% of all filings; and
- The primary reasons for financial distress include overextension on credit; unexpected expenses, illness/injury and divorce.
The full report has been published on the Social Science Research Network at http://ssrn.com/abstract=1925006 and is available for download from the Institute for Financial Literacy at www.financiallit.org/resources/articles.aspx.
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About the Center for Consumer Financial Research
The Center for Consumer Financial Research was established as a division of the Institute for Financial Literacy in 2007. The mission of the Center is to promote the effective delivery of consumer financial products, services and education through the dissemination of research within these fields. The Center accomplishes this mission by collaborating with academics and objectively assessing the effectiveness of financial education efforts, researching consumer financial behavior and publishing its findings. For more information, call 207-879-0389.
About the Institute for Financial Literacy
The Institute for Financial Literacy is a nonprofit 501(c)(3) tax exempt organization whose mission is to promote effective financial education and counseling. As a national authority on adult financial education, the Institute advances professionalism and effectiveness in the field of financial literacy by setting the National Standards for Adult Financial Literacy Education™, hosting the Annual Conference on Financial Education™, presenting the Excellence In Financial Literacy Education (EIFLE)™ Awards, maintaining the Library of Personal Finance™, and administering the Center for Financial Certifications®, Council on Financial Education Accreditation™, Center for Consumer Financial Research™ and Center for Consumer Financial Education. For more information about the Institute, visit www.financiallit.org or call 207-879-0389.
Bryan Wyatt, Director of Communications
Institute for Financial Literacy