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The Institute for Financial Literacy (“IFL”) recently released its 2011 Annual Consumer Bankruptcy Demographics Report. This is an annual report that looks at the demographic profile of the American debtor. In this report, the IFL did not limit its presentation to the 2010 bankruptcy demographic data, but it compared data from the previous five years to determine how the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), the Great Recession of 2008, and the political changes have affected the demographic makeup of the Bankruptcy petitioner. The report examines the demographic information of the bankruptcy filer in 2010, and compares the results with the findings from 2006 through 2009.
The IFL found that since the passage of BAPCPA, the following demographic changes have occurred:
- Although more than 70% of the debtors do not have a college degree, more people with advanced degrees are filing for bankruptcy
- Most debtors earn $40,000 a year or less, and approximately 40% of debtors make less than $20,000.
- Sixty percent of debtors are married, and 35% of those married debtors filed jointly
- More men are filing for bankruptcy, closing the once existing gender gap.
The IFL also reports that the following changes are attributable to the Great Recession:
- The number of bankruptcy filers 45 years old and older increased by 19%
- The number of bankruptcy filers 34 years old and younger decreased by 30% since 2006
- The number of Asian American debtors doubled
- The number of Hispanic/Latinos filing increased by 33%
- The number of college-educated people filing for bankruptcy increased by 20%
- The number of debtors earning above $60,000 increased by 66%
- The number of unemployed bankruptcy filers increased by 21% since 2006
- The number of married bankruptcy filers increased by 12% since 2006
Other interesting findings is that the number of African American bankruptcy petitioners has been steadily decreasing since 2006, while the number of Caucasian, Latino/Hispanic American and Asian American bankruptcy filers has been steadily increasing since 2006. With the exception that the number of Caucasian filers decreased by 2.3% in 2010. The number of Native American filers has been fluctuating, with the lower number of Native American filing in 2009.
The number of bankruptcy filers with graduate, bachelor’s and associate’s degrees has been steadily increasing since 2006. With the exception that the number of bankruptcy filers with a bachelor’s degree slightly decreased in 2010. Most of the bankruptcy filers only have a high school degree or GED diploma, but the number of these filers has been steadily decreasing since 2006.
With respect to the income gap, expectedly, the less you make, the more likely you are to file for bankruptcy, except if you make more than $60,000. Debtors making between $50,000 and $60,000 have consistently been the least likely to file for bankruptcy since 2006. The number of bankruptcy filers with an income of more than $60,000 has been steadily increasing since 2006.
Craig I. Kelley, West Palm Beach Bankruptcy Attorney of Kelley & Fulton, P.L., represents individual and business debtors and creditors in Chapter 7, 11, 12, and 13 proceedings. He is A.V. rated by Martindale-Hubbell directory, which is the highest rating as voted on by his peers in the legal profession. He is an Adjunct Professor of Bankruptcy Law at Palm Beach Community College and lectures nationally on the subject. For more information about bankruptcy, visit www.KelleyLawOffice.com or contact Craig I. Kelley by calling 561-491-1200 or by emailing firstname.lastname@example.org.