According to the Unites States Department of Justice, bankruptcy filings have grown overall from about 110,000 in 1960, to over 1.6 million in 2003.
Nationally, only one third of all chapter 13 filings reach a successful discharge. That is, only one third of chapter 13 cases reach the end of the repayment plan. The other two thirds of the chapter 13 bankruptcy cases are either dismissed or converted to a chapter 7 bankruptcy.
The following information was taken from an article entitled "Wrestling with Bankruptcy," written by Joseph S. Pomykala, an economics teacher and associate director of the Center for International Business and Management at Towson University in Maryland.
According to The Fragile Middle Class: Americans in Debt; written by Elizabeth Warren, Harvard Law School and Smith Business Solutions:
- In 1998, one out of every 68 households in the United States filed for bankruptcy.
- Bankruptcy filings each year in the United States are now more than double the number of filings that occurred during the entire decade of the Great Depression.
- Consumer debt has increased an average of 8 percent annually over the last 20 years, with the average family now carrying $58,500 in debt.
- Unsecured debt, like credit card debt, has grown by an average of 14 percent annually since 1978. The average balance of debt carried by the people who use credit cards to borrow money grew by half from 1992 to 1995.
- Approximately 8.6 percent of filers have declared bankruptcy once before and around 2.5 percent of bankruptcy filers have declared three or more times.
- the average age of a bankruptcy filer is 38
- Couples filing jointly make-up 44% of all bankruptcy filings Another 30% of the filers are women filing bankruptcy alone.
- Just 26% of the bankruptcy filers are men who are filing alone
- Another statistic says the most bankruptcy filers are slightly better educated than the general population
- Two out of three bankruptcy filers have lost a job
- Half of all bankruptcy filers have experienced a serious health problem
- 91% of bankruptcy filers have suffered a job loss, medical event or divorce
- The states that have the highest bankruptcy rates are Tennessee, Utah, Georgia, and Alabama
- 40% of bankruptcies result from medical crises, unemployment or divorces
- 90% of these filers have two car payments, a house payment, and an average of $2500 in credit card debt
- 10% of filers were delinquent only 5 to 29 days before bankruptcy
Bankruptcies in 1998 set another one-year record, totaling 1,350,118. This was 95% higher than in 1990. Bankruptcy losses make up about 3% of lender’s outstanding debt.
Common Misconceptions about Bankruptcy:
- 60% think it will affect you for at least 10 years
- 50% think it excuses you from paying off credit card debt
- 38% think creditors, such as mortgage lenders, are not less likely to work with those who have filed
- 21% think it is not public information.
- 16% think it excuses you from paying off student loans.
According to the Federal Reserve, the typical family filing for bankruptcy in 1997 owed more than one and a half times their annual income in short-term, high-interest debt. A family earning $24,000 a year had an average of $36,000 in credit card and similar debt.
- -19% of Americans between the ages of 18-24 declared bankruptcy in 2001. (USA Today)
- -The fastest growing group of bankruptcy filers are those people who are 25 years of age or younger. (Senate Committee on Banking, Housing and Urban Affairs, 2002)
- Bankruptcy filings in U.S. federal courts jumped 16 percent in the quarter ended June 30 from the previous period as individuals rushed to file before a tougher law takes effect, a report from the Administrative Office of the U.S. Court showed.
Bankruptcy Facts (found in USA Today, Wall Street Journal, CNN-Financial, and The Gallop Poll)
- The typical filer is a white, married homeowner who works full-time, with a household income of less than $30,000 and an average debt of $47,000. (Not including home mortgage)
- 19% of filers are college students
- 51% of filers have a close friend or relative that has also filed
- 63% of filers blamed credit card bills. 50% blamed mismanagement. 37% blamed pay cuts or job loss, and 28% blamed medical bills
- 43% of the general public polled said bankruptcy is an acceptable and easy way to settle financial difficulties
- 89% of filers still get credit card offers on a regular basis
- More than half of the filers are "baby boomers"
- Bankruptcy rates are significantly higher in the states that make it easiest for creditors to garnish wages of debtors
- Urban areas have more personal bankruptcies than rural areas, a trend that can be explained, in part, by higher divorce rates.
- Those polled say they aren't laughing all the way to bankruptcy court, like they thought they would.
- Three-quarters of filers felt "depressed" after going through a bankruptcy