Millennial bankruptcy is now rising in numbers. Members of this generation are now reaching their 20’s to mid 30’s. By this age, they easily have had sufficient time to build up impossible debt situations. The future outlook for millennial bankruptcy appears strong and on the rise. Millennial bankruptcy could be attributed to a new viewpoint common within the generation.
Millennial bankruptcy could be on the rise simply because this generation has never been exposed to anything different than the debt-ridden lifestyle. Gen X, baby-boomers, and or older generations such as the silent generation were either directly or indirectly exposed to a debt-free, paid-in-full lifestyle. Mortgages came more heavily on the scene during the 1950’s. Credit Cards came heavily on the scene in the 1980’s. Student Loans came heavily on the scene during the 1990’s. All of these generations either lived before these times or had parents and direct relatives who lived during these times. Essentially, these generations were raised with the understanding that life was actually possible (and more pleasant!) without large amounts of debt.
To these earlier generations, a debt-ridden lifestyle was just an option. Millennials, for the most part, know nothing else but debt. They have not been exposed to a debt-free lifestyle. It is nothing for most millennials to buy a home for $200,000 with a mortgage. Saving for a paid-in-full or affordable home was never an option within their understanding. To millennials, all people have always purchased homes through high-dollar mortgages. This generation knows nothing different than mortgages, student loans, and credit cards.
The age of scraping-to-get-by was never exposed to most millennials. The pioneer age, the depression, and the modest lifestyle that most people heartily enjoyed during the 1900’s is only distant history to the millennial generation. Most millennials grew up with material comforts and even luxuries that earlier generations never enjoyed, or at least never took for granted.
Because of this background of material comfort, many millennials expect to achieve a high level of material abundance at an earlier age. This is usually achieved by use of credit, especially in the form of mortgages, automobile loans, or other purchase loans. This credit-financed material abundance commonly forces millennials into bankruptcy. They are forced to live a tight budget for many years until the build-up of credit cards or other debts overwhelms them.
What many saw as a bright, new generation with new social norms and other positive characteristics also seem to fall just easily as the previous generations into the traps of debt. Time may prove that the millennial generation may even be more at risk. Most were never exposed to the economic simplicity of earlier generations. Millennial bankruptcy is on the rise. The next round of financial woes our nation faces could very well cause millennials to set new records for bankruptcy filings.