الأحد، 5 يناير 2014

Those Filing Bankruptcy Are Better Prepared, Older And Generating Cash

By Cornelius Nunev


It still will pay to get an education, but perhaps not quite as well as it once did. A recent study shows that 20 percent more university knowledgeable people filed for bankruptcy than they did five years ago. The research also saw increases in the earnings and ages of filers.

No guarantee you will not fail with a graduate diploma

Tues, the Institute for Financial Literacy report was released. It showed, from 2006 to 2010, that there was a rise in the quantity of bankruptcies filed by those with graduate degrees from 11.2 percent to 13.6 percent.

People without a college diploma make up 70 percent of all bankruptcy filers. There was a higher rate of people filing that had any degree though. This is compared to years before. Individuals possessing only a high school education make up about a 3rd of all filings.

Leslie Linfield, creator of the Institute for Financial Literacy, 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."

More than 50,000 surveyed

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. In order to control those who were able to file bankruptcy, the BAPCPA was signed by President Bush.

Age, income and racial groups

"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, those between 35 and 44 accounted for most of the filings. By 2010 that demographic had shifted to people between the ages of 45 and 54. Linfield explained that there is a great risk here. It is very significant to note. "At 54," she asked, "do they really have enough time in front of them to start over?"

The individuals made very little cash too. In fact, less than $60,000 a year was what 66 percent made.

Asian Americans, whose numbers more than doubled, climbed from 2.1 percent to 4.5 percent. Those Hispanic individuals who filed also had a rise. It went up to 8.7 percent from 6.5 percent. African-Americans had a significant decline in numbers, sinking from 15.4 percent in 2006 to 11.3 percent last year.

Over-extended credit and job loss

There has been a ton of career loss, which has caused much of the issues to happen, according to Linfield. The reasons cited by customers were job loss, reduction of income and over-extended credit.

There was a rise in the quantity of bankruptcies filed in The United States last year. They went up 1.5 million, the New York Daily News reports.




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