Knowing the Faces Of Bankruptcy
While people of all ages, races, genders, education levels, and employment and economic statuses seek bankruptcy protection, a recent study found specific characteristics might render people more susceptible to filing Chapter 7 bankruptcy.
By identifying risk factors and red flags, policymakers, businesses and financial educators can help citizens better protect their assets.
The Institute for Financial Literacy (IFL), a non-profit organization dedicated to making financial information understandable and assessable, recently released its Center for Consumer Financial Research’s annual report, which analyzed profiles of bankruptcy filers.
Researchers found that the typical person filing bankruptcy in 2007 was white, married, 35¬-44 years of age, employed earning less than $30,000 and had a high school education (some filers had minimal college experience).
It also found that women were filing bankruptcy at a greater rate than their presence in the population and men were filing in greater numbers than before.
Such findings alert industry specialists to issues of concern.
For example, the report indicates that Americans nearing their retirement years (the 35¬-44 age group) may not be prepared to retire securely when their time comes.
This knowledge is valuable for policy makers, as it can bring about new legislation encouraging workers to invest more in their retirement, resulting in less reliance on state and federal resources in their later years.
In the report, the Center recommends that the role of education levels in bankruptcy filers be further analyzed; suggesting that improved post-high school education funding could result in a reduction of the number of bankruptcies.
The report further discussed the main reasons why people sought bankruptcy protection, which included recent job loss, income deductions, overextensions on lines of credit, and/or illness or injury.
Alarmingly, the report also found that some victims of identity theft were forced to declare bankruptcy, despite laws meant to protect them. This reinforces the need for industry professionals to make identity protection a priority by better educating Americans on protecting themselves, utilizing better technologies to identify criminals, and enacting stricter penalties to prosecute them.
Although this report illustrates the need for more industry safeguards, there are steps you can take to protect your financial future. Check out Chapter7.com’s section on credit counseling resources and Total Bankruptcy’s latest news on how to improve your financial literacy.
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If you or someone you know is struggling with debt, consider talking to a chapter 7 bankruptcy lawyer about your options.