The Demographics of Bankruptcy Filers - Westgate Law

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The Demographics of Bankruptcy Filers

When trying to understand where the massive field of bankruptcy filers comes from and who they are it’s best to start with the most common causes of bankruptcy. Filing for bankruptcy isn’t anyone’s dream. It’s something that becomes necessary for certain reasons and/or situations. For instance:

  • Outstanding medical conditions (injury, illness, uncovered medical expenses, etc.
  • Reduced Income
  • Job Loss
  • Credit Debt
  • Illness/Injury
  • Unexpected Expenses
  • Divorce

In recent years, experts have noticed a change in the basic demographics of filers. Today’s typical bankruptcy petitioner is older, married, has a high school diploma and earns $30,000/year or less. Since the 1990’s, bankruptcy seems to have become a more popular solution amongst the older set. More senior citizens are filing and fewer individuals under the age of 25 are filing.

In 2007, individuals under 25 accounted for fewer than 2% of all bankruptcy filers. This was down from 11% in 1994. That same time range saw bankruptcy filers over the age of 55 more than double in number. This age group now accounts for approximately 20% of those petitioning the courts for bankruptcy. As a result, the median age of the bankruptcy filer has increased from 38 to 45.

Also of interest is the number of repeat filers. In recent studies, it has been noted that 8% of all bankruptcy filers have filed before. Repeat filers account for about 16% of bankruptcies across the nation. This could be seen as an indication of lax bankruptcy laws being exploited and has been a part of the reason behind government policies put in place to curb abuse of the bankruptcy system. Although, the new policies have had no visible deterring effect on who declares bankruptcy or when they can file.

Gender does not seem to affect the probability that an individual will turn to bankruptcy. The number of men and women filing tends to be close enough to 50/50 as to be inconsequential when pointing out interesting demographics of bankruptcy filers.  Although it does seem to make a difference if you are single or married. Married individuals now make up an increasing portion of bankruptcies (over 64% in 2010). For comparison purposes, in that same year, 17% of filers were single, 15% were divorced and 3% were widowed.

That same year, about 20% of bankruptcy filers had earned a bachelor’s degree or higher (an increase of 16% when compared to statistics gathered 4 years earlier). 36% of bankruptcy petitioners had a high school education and approximately 29% had some college education. Researchers in recent years have pointed out that individuals with “some” college education could be at the greatest risk for bankruptcy due to the fact that they experience the debt of a higher education without the benefit of higher pay that often comes with a diploma.

If you find yourself considering bankruptcy, don’t worry if you don’t fall into the “typical” demographic outline. You don’t have to be a certain type of person or earn a certain amount of money. Individuals from all walks of life can need the benefits of bankruptcy. Call Westgate Law today to discuss the details of your situation and how bankruptcy may suit your needs.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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