"Lower bankruptcy filing rates for younger people may be the result of healthier finances," suggests Warren. "However, young people may be juggling debt longer before they take more extreme measures. If that is the case, we can expect to see more bankruptcies on the horizon as Generations X and Y grow older. Our culture has normalized debt. Now, individuals nearing or in retirement are realizing how difficult it can be to manage that debt as they age."
Research found that by 2007, the median age for bankruptcy filers had increased to 43 years old in 2007 from 36.5 years old in 1991. A declining economy, increasing healthcare costs, and a general lack of retirement preparedness puts older Americans and their families at greater risk for bankruptcy and continued financial stress.
"This study is cause for concern," said Susan Reinhard, Senior Vice President of AARP's Public Policy Institute. "It indicates that financial security is progressively eroding for many older Americans. We are exploring why this is happening and what can be done to prevent it."
Undoubtedly, the 2005 amendments to bankruptcy law - which changed what filing for bankruptcy looked like for Americans - curtailed filings early on and hold deep ramifications for the individual and research. While it is possible that changes to the law impacted various generations differently, bankruptcy's rising rates among the older population reflects the increasing financial stress that so many Americans are feeling today.
