Middle-Class Mothers Most Likely To Be Bankrupt

Middle-class, educated women are most vulnerable to bankruptcy, says Harvard Law's Elizabeth Warren.

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By Bonnie Erbe, Thomas Jefferson Street blog

I've known for a long time that women make up the majority of low-wage and minimum wage workers. Women comprise two-thirds of the minimum wage labor pool. But I didn't know, until I read this piece by Harvard Law School Professor Elizabeth Warren that educated, middle-class women are most vulnerable to bankruptcy:

Bankruptcy exposes the economic vulnerability and insecurity of middle class women. The women in bankruptcy, like the men who file for bankruptcy, are a fairly representative cross-section of the American middle class. Their education levels are slightly higher than the population generally, with women in bankruptcy more likely to have attended college than their counterparts. Most are employed when they file.

But by the time they're in bankruptcy, Prof. Warren reports, they are teetering on the brink of poverty. And, she notes, a college degree doesn't seem to protect women from filing for bankruptcy as much as it does men:

Based on projected figures, more than a million women will find their way to the bankruptcy courts this year-more women than will graduate from college, receive a diagnosis of cancer, or file for divorce. The numbers are staggering.

The economic factor that seems to most often separate women who file for bankruptcy from those who don't is, of course, women are more likely to be the sole support for their children.

Not every woman can marry a guy who delivers a pre-nuptial settlement the size Elin Nordegren Woods received. The best advice I can offer women who want to skirt the ledge of bankruptcy is A—don't overspend and B—don't have children without a financial backup plan—make sure you or your husband will always have enough money to support those kids if one of you loses a job—even if the marriage falls apart.