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What’s driving more women to seek debt help?

Julie Sherrier

My boss forwarded me a study called “Women, Debt and the Recession,” and asked if I’d like to blog about the topic. Maybe he thinks I know a thing or two about being a female in debt and weathering the recession. Seeing as I just wrote about my new frugality (or lack thereof), perhaps I would have some insight about the rather startling statistics revealed in this recent CareOne Debt Relief Services’ survey.

The survey polled 50,000 customers in two, six-month periods — from Oct. 2007 to March 2008 and again from Oct. 2009 to March 2010.

Here are some of the stats:

  • 45 percent of women surveyed had upward of  $50,000 in debt (a 33 percent increase from the start of the recession).
  • Upper income household women comprised a greater share of those seeking debt relief assistance.
  • There’s been a decline in the number of women with less than $15,000 in debt.
  • Older women (especially those widowed or divorced) are seeking debt relief help in greater numbers than ever before (61 percent increase in those aged 70-74).

According to CareOne, nearly two-thirds of its clients are women seeking help with their debt loads. I guess that isn’t too surprising. It’s kind of like asking for directions — women are more likely to seek help when lost. But I pondered just why these numbers might be so high and came up with the following reasons:

  • Unemployment.
  • Bankruptcy, foreclosure.
  • Loss of other household income (spouse or partner lost a job).
  • Rising cost of living (gas, food, etc.) as salaries, retirement income remain stagnant.
  • Underemployment (lost job and had to settle for something less, but bills are the same).
  • Increase in higher education costs (for college kids).
  • Inability to make appropriate lifestyle changes.

Frankly, I don’t think women are intentionally putting themselves into these precarious financial situations by buying Gucci bags or Christian Louboutin pumps. Maybe a few are (most notably: RHNJ’s Teresa Giudice), but not the majority.

What I’ve witnessed is women are getting into debt by spreading their money around to help others in need, whether we can afford to or not. I’m talking about sending an extra $100 a month to help an aging parent who lives on a fixed income, wiring a couple hundred to an adult child who needs cash or helping a friend out who lost everything in a divorce.

The women I know also tend to be yo-yo debtors. They overspend, get freaked out, pay off the debt and then start the cycle all over again. But once all resources to repay debt have been tapped, such as home equity (what equity?), bonuses (again, what bonus?), raises (huh?),   etc., then they’re stuck in the freaked-out cycle.

The statistic that bothers me the most is the increase in widowed and divorced women seeking debt relief in the 70-74 age bracket. While we can blame the usual suspects such as medical costs, I can tell you that we get a lot of letters from worried widows whose spouses have died and left them with joint credit card debt and little or no assets to cover that debt. Plus, women of that generation (my mother included), just aren’t, as a whole, particularly financially savvy. They get duped. A lot.

Do you have an opinion why higher income and older women are flocking to get debt relief? My ears are open.

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