One of the greatest misconceptions held about bankruptcy is the belief about who actually files bankruptcy. Many hold a stereotypical view of those who file bankruptcy and there is a generally lack of understanding about filing statistics.
Most people mistakenly believe a typical bankruptcy filer is a young person suffering the consequences of bad money-management, credit card debt, and college debt. Or, they may believe bankruptcy filers consist of uneducated, low-income families who have lived above the means.
This could not be further from the truth and the reality is that there is no typical profile of who files bankruptcy. Bankruptcy can affect all ages, income and educational levels and often time those who file are doing so due to circumstances outside of their control.
Bankruptcy Statistics
The Institute for Financial Literacy did a five-year study in order to get a clearer understanding of who files bankruptcy and why. Their research revealed that there is no set profile of those who file bankruptcy. Here are some statistics they found:
Age: Most of the filers (56%) were between the ages of 35 and 54. About 20 percent of filers were 55 years or older. Those ages 25 to 34 and made up about 19% of filers.
Gender: More women file than men: 52.4% versus 47.6%.
Education level: College graduates and those with graduate degrees made up about 58% of filers. Those with high school diplomas or GEDs made up about 36% and those with no high school education about 6%.
Income level: About 59% of filers made $30,000 a year or less; 27% made between $30,000 and $50,000, and 14% make $50,000 or more a year.
Job Status: 73% of filers had a job or were self-employed. 17% were currently unemployed, and the remaining 10% were deemed out of the job market.
Marital Status: 64% of all bankruptcy filers were married couples, and less than 15% of unmarried filers were divorced.
There is no set profile of a bankruptcy filer because the outside financial circumstances of an individual dictate their need to file bankruptcy, not their personal status.
While poor money management or life choices can lead to bankruptcy, most bankruptcies are triggered by circumstances the person could not control. Research has shown that the three leading causes of bankruptcy are medical debt, job loss, and divorce with medical debt being another leading cause of filing. These things can happen to anyone at any age and even if they seem to be in good financial shape.
If you are facing financial difficulties beyond your control, bankruptcy may solve your problems. Contact us for a free evaluation and let us see if we can help you get a financial fresh start.