Boomer or bust

August 28, 12:03 PMBaby Boomer ExaminerPaul Briand

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Bankruptcies have plagued the American economy of late, affecting some age groups worse than others, according to a new report.

The report -- entitled "Generations of Struggle" -- reached three major conclusions:
1) Americans 55 and older have experienced the sharpest rise in bankruptcies;
2) Americans 34 and younger have seen the great decreases in bankruptcy filings;
3) The influence of Baby Boomers on filings has moderated substantially.

The report is the work of the Consumer Bankruptcy Project in cooperation with the AARP Public Policy Institute. The research will be reported more fully in the January 2009 "Harvard Law and Policy Review." One of the co-authors is Elizabeth Warren, a Harvard Law School professor. "Older Americans are hit by a one-two punch of jobs and medical problems, and the two are often intertwined," she said in an interview with the Associated Press.

The bankruptcy project compared it collected from 1991, 2001 and 2007.

By age group, here's what the study found in terms of the increase of bankruptcies over the 16-year period:
-- 55-64, up 40 percent
-- 65-74, up 125 percent
-- 75-84, up 433 percent.

In the broad grouping of Americans 55 and older, they accounted for 8 percent of all bankruptcy filers in 1991. By last year, according to the data, that had rise to 22 percent. No matter how you slice the age groupings, the report concluded, "the bankruptcy risk for older Americans has increased substantially."

The good news for Baby Boomers is that, as a generation, it is playing a less prominent role in the frequency of bankruptcies.

"The award for the most filings no longer belongs to the Boomers," said the report. "Instead, Gen Xers in their late 30s and 40s now supply the greatest number of filers."

And it's not credit cards that are the primary culprit.

As Warren indicated, the sweeping job losses have put pressure on a family's ability to manage expenses and debt, particularly when it comes to health care.

Warren told the Associated Press that increasing numbers of Americans are entering their retirement years with significant debt and are still paying off mortgages. She says it's wrong to assume that lives of luxury are bankrupting seniors; rather, they're incurring debts to meet such basic needs such as medical treatment.