"Another Day Older and Deeper in Debt": Debt, Financial Distress, and Bankruptcy over the Life Course

Allison L. Mann, Columbia University
Ronald J. Mann, Columbia University

Abstract

This paper examines how the risks of debt, financial distress, and bankruptcy shift over the life course. The paper compares data from the 2007 Survey of Consumer Finances and the 2007 Consumer Bankruptcy Project to illustrate the ways in which bankrupt households differ from typical households. The paper suggests that there are age differentials in the distribution of unplanned events and in the ability of households to use credit markets to limit the adverse effects of those events; as a result, the typical patterns of bankruptcy filers differ by age. The paper relates those effects to a substantial increase in recent decades in the incidence of financial distress and bankruptcy among the elderly.