Bankruptcy Landscape is Turning Grey

This will come as no surprise to practitioners in the trenches of consumer bankruptcy law, but . . . . the face of America’s debtor population is acquiring wrinkles. According to a study just released by the Administrative Office of the U.S. Courts, the average age of debtors in bankruptcy is increasing at a much faster rate than the age of the general population.

During the 8 year period from 1994 to 2002, the segment of our population aged 45 to 54 increased by 19.9%. The percentage of bankruptcy filers aged 45 to 54 increased by 43.9%.

Similarly, during the same 8 years the segment of our population aged 55 and over increased by 3.1%. The percentage of bankruptcy filers aged 55 and over increased by 45.8%.

We’ve all been anticipating the time when veterans of the credit economy who haven’t saved for retirement begin facing declining incomes in their declining years. The bankruptcy courts may be full of these folks for the next two decades. Will they organize? American Association of Retired Debtors (AARD)?

Some good news from the study: Bankruptcy filers aged under 25 declined by 60.4% during that same period, at a time when the spiraling cost of higher education has put huge economic pressure on kids. Credit education like the CARE program (Credit Abuse Resistance Education) may deserve part of the credit.