Having children, going broke

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http://today.msnbc.msn.com/id/3079221/

In just twenty years, the number of women filing petitions for bankruptcy had, in reality, increased by 662 percent. As I soon discovered, divorced and single women weren’t the only ones in trouble; several hundred thousand married women filed for bankruptcy along with their husbands.

Our research eventually unearthed one stunning fact. The families in the worst financial trouble are not the usual suspects. They are not the very young, tempted by the freedom of their first credit cards. They are not the elderly, trapped by failing bodies and declining savings accounts. And they are not a random assortment of Americans who lack the self-control to keep their spending in check. Rather, the people who consistently rank in the worst financial trouble are united by one surprising characteristic. They are parents with children at home. Having a child is now the single best predictor that a woman will end up in financial collapse.

Consider a few facts. Our study showed that married couples with children are more than twice as likely to file for bankruptcy as their childless counterparts. A divorced woman raising a youngster is nearly three times more likely to file for bankruptcy than her single friend who never had children.

Over the past generation, the signs of middle-class distress have continued to grow, in good times and in bad, in recession and in boom. If those trends persist, more than 5 million families with children will file for bankruptcy by the end of this decade. That would mean that across the country nearly one of every seven families with children would have declared itself flat broke, losers in the great American economic game.

And the lines at the bankruptcy courts are not the only signs of financial distress. A family with children is now 75 percent more likely to be late on credit card payments than a family with no children. The number of car repossessions has doubled in just five years. Home foreclosures have more than tripled in less than 25 years, and families with children are now more likely than anyone else to lose the roof over their heads. Economists estimate that for every family that officially declares bankruptcy, there are seven more whose debt loads suggest that they should file for bankruptcy — if only they were more savvy about financial matters.

Read more: http://today.msnbc.msn.com/id/3079221/