In 2006, more than 597,000 Americans filed for personal bankruptcy protection. So if you're in financial distress, you are by no means alone. But have you ever wondered who exactly is filing bankruptcy? Researchers at the Institute for Financial Literacy (IFL) have. Here's a look at their findings.
In its analysis of the bankruptcy filing statistics gathered by the IFL, the American Bankruptcy Institute Journal notes that such figures are difficult to come by, since few relevant questions are required by official bankruptcy forms. But results gleaned from a survey given to bankruptcy filers provided enough information to draw some conclusions about Chapter 7 and 13 bankruptcy filings in the United States.
Keep in mind that not everyone responded to every question, so some percentages will not add up to 100.
According to the most recent data available from the U.S. Census Bureau, women compose 51% of the population, and men account for 49%. Survey results showed that women account for 53.6% of bankruptcy filings, and men only for 46.4%.
This indicates that women are filing for bankruptcy more often than men, although analysts have not yet pinned down a single causal factor for this difference.
Census statistics indicate that the general population of the United States contains an even spread of people between the ages of 25 and 54, with each subgroup comprising about 15% of the population.
Bankruptcy petitions for that group are not so evenly distributed.
Filers between the ages of 35 and 44 accounted for 29% of all bankruptcy filings, nearly double the percentage of this group in the general population. Also significant was the 55 and older group, into which 22% of filers fell. Some analysts have reportedly sought to determine whether older bankruptcy filers truly get the same fresh start that younger filers receive.
The statistics on ethnic background are a bit murky to interpret because the U.S. Census Bureau and the IFL collect information in slightly different ways-while Census forms permit people to indicate multiple ethnicities, the IFL study allowed only one.
Generally, though, 72.6% of respondents identified themselves as being White/Caucasian (compared to 81% of the general population); 6.6% claimed Hispanic/Latino roots (14% of the population); 15% percent noted that they were African American/Black and around 3% claimed to be Asian or American Indian.
Data shows that 39.7% of those who filed bankruptcy had an education level of high school or GED. An additional 29.9% reported having attended college but never receiving an associate's or bachelor's degree. Only 4.9% indicated having a graduate degree.
These numbers raise an interesting question about the role of debt from student loans in bankruptcy filings. Some analysts conjecture that those who face debts from student loans but lack the income boost that often accompanies earning a degree are particularly susceptible to bankruptcy.
Income levels of bankruptcy petitioners were largely unsurprising. 65.6% of respondents listed their personal yearly income as less than or equal to $30,000, and only 10.5% reported making $50,000 or more annually.
The 2004-2005 census found that the median income in the United States was $46,071, meaning that most of those who file bankruptcy make well below the median income.
Of those who completed the survey, 63.7% indicated that they were employed; 8.3% were self-employed; 13.1% were unemployed; 9.4% were retired and 5.5% identified themselves as students or homemakers.
In the general U.S. population, 56.5% of people are married; of those who responded to the bankruptcy survey, 57.1% were wed. Despite this, only 29.1% filed joint petitions, leading analysts into a veritable whirlwind of excitement trying to figure out the reasons for the discrepancy.
Additionally, 21.9% were single, 15.9% were divorced and 1.2% listed themselves as cohabitating.
One of the most interesting issues addressed by the survey was an exploration of the factors that led bankruptcy filers into financial distress.
Respondents were encouraged to indicate all factors that applied to their cases, and the numbers came out as follows: 62.8% cited being overextended on credit; 57.2% blamed unexpected expenses; 52.2% were hit by an income reduction; 36.1% were dealing with job loss; 32.7% faced injury or illnesses; 5.4% were affected by divorce; 23.7% cited births or deaths in the family and 2.3% traced their difficulties to identity theft.
The typical bankruptcy filer in 2006 was a white married woman with a high school education who made less than $30,000 per year and dealt with many destructive financial forces before turning to the help of the bankruptcy courts.