What Type of People Are Generally More Likely to File for Bankruptcy?

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By:Mike Cibik


What Type of People Are More Likely to File For Bankruptcy?

A five-year study of the 2005 Bankruptcy Reform Act conducted by The Institute For Financial Literacy paints a picture of who files bankruptcy, and why.

The older you are, the more likely you will file for bankruptcy. Almost 56 percent of filers were between the ages of 35 and 54. More people older than 54 file bankruptcy than people younger than 35.

While over 36 percent of bankruptcy filers attained a High School diploma or GED, the number with College degrees and Graduate Level degrees steadily increased over the years. In fact, college-level attendees and higher make up over 57 per cent of filers, while less than 6 percent of filers did not attain a High School diploma or GED.

People earning less than $30,000 annually make up the bulk of filers, at 38 percent, but that number is declining. The next higher group, at 21 percent, is the $30,000-40,000 income level, also a declining number. Likewise, the third highest filing group earned $40,000-$50,000 and also shows a decreasing percent of overall filers. Remarkable, the highest income category of those making over $60,000 almost doubled to 9 percent over the five years studied.

Almost 70 percent were employed and less than 17 percent were unemployed, with the rest out of the job market as being retired, homemakers or students.

Over 64 percent were married and less than 15 percent of unmarried filers were divorced.

Just what causes people to file for bankruptcy? People who work in the field commonly see cases filed due to job loss, divorce, illness, foreclosure, eviction, substance abuse, gambling, taxes, and medical bills. This study asked debtors to identify factors that affected their situation, and most people chose being overextended on credit, a loss of income, unexpected expenses, job loss, illness, and divorce, in that declining order.


Cibik & Cataldo P.C has been providing superior debt-relief legal services to clients throughout the state of Pennsylvania for over 35 years. Michael A. Cibik, Esquire is a partner in the firm and one of the few attorneys in the Philadelphia area certified by the American Bankruptcy Board. Please contact us at 215-735-1060 for a free consultation today!


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