Since the 1960s, personal bankruptcy has often been a haven for the young and struggling. Bankruptcy lawyers say younger and less-educated people tended to rack up too much debt while starting families and jobs, without a savings cushion to carry them through lean times. No government agency tracks the age of bankruptcy filers, but the rule of thumb, say those who've worked in and studied the field, was the older the group, the fewer the filers.
That's changing, as personal bankruptcy filings are hitting all-time highs. Last year, there were more than 1.6 million such filings, compared with 875,000 a decade earlier. Some experts say much of the increase is being driven by older people, many of whom have decades of work experience in white-collar jobs.
The Consumer Bankruptcy Project, which surveyed 2,400 bankruptcy filers in 2001 and 1991, found that on a per capita basis, older people are now the most likely to file. In 2001, for instance, per capita filings of individuals ages 45 to 54 increased 58%, to 11 per thousand, according to the study. "The curve is moving to the right," says Elizabeth Warren, a professor at Harvard University Law School, who co-authored the study. "It reflects a more frightening reality for a wide swath of middle-class America."
Ben B. Floyd, a personal-bankruptcy trustee in Houston for the past 30 years, says he's now seeing people "who obviously had a white-collar background. They come in looking lost." Personal-bankruptcy lawyers across the country say they've witnessed a tidal shift in their practices, seeing older clients with longer work histories. "These people didn't take their credit cards to Atlantic City," says Gabriel Del Virginia, a New York bankruptcy attorney. "It's largely because people lost their jobs or had a catastrophic illness."
Bankruptcies have doubled since the Clinton years. Is it a coincidence?
Note to the GOP: why don't you tackle the real, systemic problems of job and health security and your own fiscal responsibility before you address the high-drama but low-impact problems of abortion and gay marriage?