More College Grads Filing for Bankruptcy
Historically, the typical personal bankruptcy filer has been low-income and under-educated. But over the past five years, financial distress has affected more and more people with college degrees.
According to a new study by a financial nonprofit, the rate of college graduates filing for bankruptcy increased by 20%. which underscores the broad reach of the Great Recession.
Those who didn't graduate from college still make up 70% of debtors.
The study involved more than 50,000 respondents and ran from 2006 to 2010, tracking the financial status of debtors since the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act.
Not surprisingly, the rate of unemployed Americans filing for bankruptcy increased by 21% since 2006. But since the study was first conducted in 2006, there has been a gradual shift in bankruptcy filings toward higher income earners.
In 2006, only 5.5% of the debtors participating in the report made more than $60,000, but this income bracket shifted to more than 9% by 2010.
Married Americans were hit particularly hard, experiencing a 12% increase in bankruptcy filings since 2006. Married people represent more than 60% of all filings. Of those filings, nearly 35% were joint petitions, the study said.
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