A growing number of baby boomers are going bust.
A newly released study found that 42% of all individuals filing for bankruptcy were between the ages of 45 and 64 in 2007 and that older Americas are filing for protection from creditors at a much faster rate than younger adults.
“The baby boomers are disproportionately represented in bankruptcy proceedings,” wrote John Golmant and James Woods, who compiled the study that appears in the September issue of the American Bankruptcy Institute’s ABI Journal. Golmant is a statistician and Woods is a social science analyst, both with the Administrative Office of the U.S. Courts in Washington.
Bankruptcy filings are increasing fastest among individuals between the ages of 55 and 64, the study found. From 2002 to 2007, the percentage of filers in that category grew 65%.
By comparison, the demographic group that experienced the largest percentage drop in bankruptcy filings was Americans 25 and younger, down 60% in 2007 from 2002.
“This significant demographic uptick in older bankruptcy filers has outstripped the aging of the general population as a whole,” Golmant and Woods wrote.
The authors said the recent housing crisis is at least partly to blame, as falling home prices left baby boomers with little or no home equity. The study noted that persons older than 50 were often targeted during the refinancing boom in the early part of last decade.
High levels of credit card debt and mounting health care bills also contributed to the higher number of filings among older Americans, the study found.
The recent study shows the continuation of trend stretching back to at least 1994. In that year, people between the ages of 55 to 64 accounted for 7% of all individual filings. In 2007, the same group accounted for 15.2% of consumer bankruptcies.
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