The Alarming Rise In Bankruptcy Filings

Posted by Nick Niesen on October 29th, 2010

When you take the time to view the statistics of bankruptcy you will be alarmed and shocked. In a years time form 2006 to 2007 the number of bankruptcy filings increased by 39,365. On June 30th, 2006 it was recorded that for the year a total of 91,674 people filed for bankruptcy. On June 30th, 2007 it was recorded that for the year a total of 91,674 people had filed for bankruptcy.

The rises in chapter 7 bankruptcies are steadily climbing and are not showing any chance of ceasing. The numbers of those who have filed for bankruptcy are the highest since the new bankruptcy laws of 2005 were set in place. The highest bankruptcy rates by state include Tennessee, Utah, Georgia and Alabama.

Other bankruptcy statistics are just as jaw dropping. Comparing Non-business to business filings you may be surprised. In 2006, the number of bankruptcies was 597,965 for Non-Business cases. Only 19,695 bankruptcies were filed by businesses in 2006.

When it comes to personal bankruptcies over half of those who file have experienced a serious health condition. Two out of three fliers have lost their job and 44% of filers are couples. More women than men file for bankruptcy. Women are rated at 30% while men rank at 26%. Sadly less than 9% of those who file for bankruptcy have not suffered job loss, medical expenses or divorce. These cases are often due to poor financial choices. The top ranking cause of bankruptcy is credit card debt.

You would imagine as we evolve in society that we would have a better understanding of how to control our finances or have methods set in place to help us prevent us from filing bankruptcy. Perhaps future statistics will show a decline in bankruptcy, as financial management courses are available. Only time will tell.

Too often people are led to believe that bankruptcy only occurs due to irresponsibility and poor money management. When in fact one of the top rated causes of bankruptcy is due to medical bills. Studies have shown that out of 1.5 million bankruptcies, half of those were due to out of control medical bills. Three quarters of these individuals were covered by health insurance. With outrageous prices for medication, hospital stays and other medical treatments it is easy to acquire a medical bill in the thousands.

With many Americans struggling to make ends meet while earning money to be considered middle class, medical bills can become a nightmare. Even by making constant payments it is near impossible to pay of harassing bill collectors. There have been examples of people who file bankruptcy who are excellent bill payers, have nice homes, drive nice vehicles and work hard to care for their families. For one woman this was her life until she was stricken with cancer. Medical bills took over her life financially and she was forced to choose bankruptcy for debt relief.

Other instances include an infant becoming stricken with the flu. The child was suffering from a high fever, not drinking fluids or eating as well as showing seizure like symptoms. The parents rushed their child to the emergency room for treatment. The child was cared for and regained its health with no complications. Though the child was healthy once again the parents became overwhelmed in medical bill debt. They were forced to file bankruptcy in order to regain financial control.

Life carries unexpected events, especially when it comes to human health. For cases like those listed here, frivolous spending but an illness that was unexpected did not bring on bankruptcy. This can easily explain why medical bills are a number one cause of bankruptcy filing.