Rising Bankruptcy claims among Baby Boomers

Thu, Aug 28, 2014

Bankruptcy, Debt Mitigation, Elder Law

baby boomerIn both absolute and relative terms, the number of bankruptcy cases being filed by baby boomers is on the rise.  A recent ABI study found that 42% of all individuals filing for bankruptcy were between the ages of 45 and 64. In addition, the rate of filings among older Americans is increasing faster than their younger counterparts.

John Golmant and James Woods compiled a study that appears in the American Bankruptcy Institute’s ABI Journal stating that, “The baby boomers are disproportionately represented in bankruptcy proceedings.” Golmant and Woods are both with the Administrative Office of the U.S. Courts in Washington.

Between the years from 2002 and 2007, the percentage of filing adults in their 50s and 60s grew 65%. In comparison, the largest percentage drops in bankruptcy filings were in Americans under age 26.  The spike in the number of baby boomer’s filing for bankruptcy in comparison to the rest of the general population is alarming.

Some commentators have speculated that this spike in the baby boomers filings may be partly the result of the economic downturn along with the housing crisis that started in 2008.  The falling home prices left the baby boomers with little or no home equity (especially compared with their younger counterparts who had a lower rate of home ownership) and diminishing retirement money from the stock market.  Also, one study noted that people older than 50 were often targeted during the refinancing boom in the early part of the last decade, which contributed to a higher amount of mortgage indebtedness among the older population.

Increasing levels of credit card debt and mounting health care bills also contributed to the number of older Americans filing for bankruptcy.  Another study showed that this trend started back in 1994.  In that year, people between the ages of 55 to 64 accounted for only 7% of all the individual filings.  By 2007, the study reported that the same age group accounted for 15.2 % of bankruptcies filed.  That number is much higher today.

Attorney Christopher D. Smith, Sr. is a Board Certified Consumer Bankruptcy Lawyer by the American Board of Certification.  SmithLaw is located in Lakewood Ranch, Florida.  Attorney Smith concentrates in bankruptcy, civil litigation, probate, estate planning, and elder exploitation cases in the Sarasota and Bradenton area.  Call 941-202-2222 to learn more.  SmithLaw offers free consultations in certain areas, including consumer bankruptcy, probate, and personal injury matters.

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