We've all learned that it will pay to get a college degree. But perhaps it does not pay quite as well as it used to. The amount of people with a university diploma filing for bankruptcy has risen in the last 5 years by 20 percent, as reported by a brand new study. The study also shows increases in age and earnings of filers.
No guarantee you won't fail with a graduate diploma
There was an increase from 2006 to 2010 from 11.2 percent to 13.6 percent of those with graduate degrees filing for bankruptcy according to the Institute for Financial Literacy report released Tuesday.
There are many individuals without university degrees filing for bankruptcy still. This is the suit for about 70 percent of filers. There was a higher rate of individuals filing that had any diploma though. This is compared to years before. Those with just a high school education have a greater chance of filing. These people make up for about a 3rd of all filings done.
Leslie Linfield, founder 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."
Not a small study
From 2006 to 2010, there were quite a few people in courses for cash management or bankruptcy credit counseling. In fact, there were over 50,000 people in these courses. Its reason was to track bankruptcy statistics following the 2005 Bankruptcy Abuse Prevention and Customer Protection Act. To be able to control those who were able to file bankruptcy, the BAPCPA was signed by President Bush.
Considering various factors
"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. By 2010 that demographic had shifted to individuals between the ages of 45 and 54. Linfield finds them particularly at risk. "At 54," she asked, "do they really have enough time in front of them to start over?"
About 66 percent of filers made less than $60,000 a year.
Asian Americans, whose numbers more than doubled, climbed from 2.1 percent to 4.5 percent. There was also an increase from 6.5 percent to 8.7 percent in Hispanic filers. A decrease from 15.4 percent in 2006 to 2010's 11.3 percent was shown for African-Americans. This shows a huge decline in numbers.
What can be blamed for the change?
Linfield explains that there is a reason for this huge increase in statistics. It is because of the career loss. Customers responding to the study cited over-extended credit, job loss and reduction of income more than any of other reasons as the causes of their financial turmoil.
There was an increase in the amount of bankruptcies filed in America last year. They went up 1.5 million, the New York Daily News reports.
No guarantee you won't fail with a graduate diploma
There was an increase from 2006 to 2010 from 11.2 percent to 13.6 percent of those with graduate degrees filing for bankruptcy according to the Institute for Financial Literacy report released Tuesday.
There are many individuals without university degrees filing for bankruptcy still. This is the suit for about 70 percent of filers. There was a higher rate of individuals filing that had any diploma though. This is compared to years before. Those with just a high school education have a greater chance of filing. These people make up for about a 3rd of all filings done.
Leslie Linfield, founder 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."
Not a small study
From 2006 to 2010, there were quite a few people in courses for cash management or bankruptcy credit counseling. In fact, there were over 50,000 people in these courses. Its reason was to track bankruptcy statistics following the 2005 Bankruptcy Abuse Prevention and Customer Protection Act. To be able to control those who were able to file bankruptcy, the BAPCPA was signed by President Bush.
Considering various factors
"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. By 2010 that demographic had shifted to individuals between the ages of 45 and 54. Linfield finds them particularly at risk. "At 54," she asked, "do they really have enough time in front of them to start over?"
About 66 percent of filers made less than $60,000 a year.
Asian Americans, whose numbers more than doubled, climbed from 2.1 percent to 4.5 percent. There was also an increase from 6.5 percent to 8.7 percent in Hispanic filers. A decrease from 15.4 percent in 2006 to 2010's 11.3 percent was shown for African-Americans. This shows a huge decline in numbers.
What can be blamed for the change?
Linfield explains that there is a reason for this huge increase in statistics. It is because of the career loss. Customers responding to the study cited over-extended credit, job loss and reduction of income more than any of other reasons as the causes of their financial turmoil.
There was an increase in the amount of bankruptcies filed in America last year. They went up 1.5 million, the New York Daily News reports.
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