HAVE CHILDREN? YOU’RE MORE LIKELY TO FILE BANKRUPTCY

August 23, 2003

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Parents are in worse economic shape than they’ve ever been in, when compared with people who don’t have children. That view is expressed by Harvard law professor Elizabeth Warren and her daughter Amelia Warren Tyagi in their forthcoming book, “The Two-Income Trap,” according to an article in The New Yorker. The authors demonstrate that having a child is now the best indicator of whether someone will end up in “financial collapse.”

According to their study, married couples with children are twice as likely as childless couples to file for bankruptcy. They are 75 percent more likely to be late paying their bills. And they’re also far more likely to face foreclosure on their homes. The study also indicates that most of these people are not, by the usual standards, poor. Rather they are middle-class couples who are in deep financial trouble in large part because they have kids. Source: Morgan King, Consumer Bankruptcy Letter.