We've all learned that it pays to get an education. But perhaps it doesn't pay as well as it used to. A brand new study shows that the quantity of college knowledgeable individuals filing for bankruptcy has risen by 20 percent over the last five years. The study also shows boosts in age and income of filers.
Increase in graduate degree bankruptcies
The report, released Tuesday by the Institute for Financial Literacy, showed that the quantity of bankruptcy filers with a graduate degree climbed from 11.2 percent in 2006 to 13.6 percent last year.
There are many people without university degrees filing for bankruptcy still. This is the case for about 70 percent of filers. Individuals with all degrees were filing more often than they were the year before. People possessing only a high school education make up about a third of all filings.
Leslie Linfield is the Institute for Financial Literacy founder. She said:
"There's these mythologies out there that if you go to college and you get a degree, you're going to do financially better. I think this data is starting to erode at this myth. ... 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."
Many people involved
There were more than 50,000 debtors in courses for bankruptcy credit counseling or cash management from 2006 to 2010. Its purpose was to track bankruptcy statistics following the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. To be able to control those who were able to file bankruptcy, the BAPCPA was signed by President Bush.
Different factors looked at
"While less educated, low-income individuals continue to represent the typical bankruptcy filer," Linfield said, "this report underscores a sophisticated evolution of the profile of the American debtor that now extends to disparate age, income and ethnic groups."
In 2006, the filings were all around the same age. They were around 35 and 44. When 2010 came around, those numbers changed. It was between 45 and 54 at that point. Linfield explained that there is a great risk here. It is very important to note. "At 54," she asked, "do they really have enough time in front of them to start over?"
The people made very little money too. In fact, less than $60,000 a year was what 66 percent made.
There was a massive increase for Asian Americans. It increased to 4.5 percent from 2.1 percent. Those Hispanic people who filed also had an increase. It went up to 8.7 percent from 6.5 percent. A decrease from 15.4 percent in 2006 to 2010's 11.3 percent was shown for African-Americans. This shows a large decline in numbers.
Over-extended credit and job loss
Linfield blames the large number of white-collar job losses in the banking and other industries for the lion's share of the statistical boosts. Customers responding to the study cited over-extended credit, career loss and reduction of income more than any of other reasons as the causes of their financial turmoil.
There was an increase in the number of bankruptcies filed in America last year. They went up 1.5 million, the New York Daily News reports.
Increase in graduate degree bankruptcies
The report, released Tuesday by the Institute for Financial Literacy, showed that the quantity of bankruptcy filers with a graduate degree climbed from 11.2 percent in 2006 to 13.6 percent last year.
There are many people without university degrees filing for bankruptcy still. This is the case for about 70 percent of filers. Individuals with all degrees were filing more often than they were the year before. People possessing only a high school education make up about a third of all filings.
Leslie Linfield is the Institute for Financial Literacy founder. She said:
"There's these mythologies out there that if you go to college and you get a degree, you're going to do financially better. I think this data is starting to erode at this myth. ... 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."
Many people involved
There were more than 50,000 debtors in courses for bankruptcy credit counseling or cash management from 2006 to 2010. Its purpose was to track bankruptcy statistics following the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. To be able to control those who were able to file bankruptcy, the BAPCPA was signed by President Bush.
Different factors looked at
"While less educated, low-income individuals continue to represent the typical bankruptcy filer," Linfield said, "this report underscores a sophisticated evolution of the profile of the American debtor that now extends to disparate age, income and ethnic groups."
In 2006, the filings were all around the same age. They were around 35 and 44. When 2010 came around, those numbers changed. It was between 45 and 54 at that point. Linfield explained that there is a great risk here. It is very important to note. "At 54," she asked, "do they really have enough time in front of them to start over?"
The people made very little money too. In fact, less than $60,000 a year was what 66 percent made.
There was a massive increase for Asian Americans. It increased to 4.5 percent from 2.1 percent. Those Hispanic people who filed also had an increase. It went up to 8.7 percent from 6.5 percent. A decrease from 15.4 percent in 2006 to 2010's 11.3 percent was shown for African-Americans. This shows a large decline in numbers.
Over-extended credit and job loss
Linfield blames the large number of white-collar job losses in the banking and other industries for the lion's share of the statistical boosts. Customers responding to the study cited over-extended credit, career loss and reduction of income more than any of other reasons as the causes of their financial turmoil.
There was an increase in the number of bankruptcies filed in America last year. They went up 1.5 million, the New York Daily News reports.
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