Every year more women file for bankruptcy than men do. On average, these women are Caucasian, married, and middle-aged. While these women are employed, their annual salary is less than $40,000. The majority of these women do have a high school education, are paying on college loans and have overextended their credit.
The highest numbers of individuals who file bankruptcy earn less than $20,000 a year. In 2006, only 5 percent of those earning $56,000 a year filed bankruptcy; however, in 2010 that number has almost doubled.
Causes of Financial Stress that Lead to Bankruptcy
In 2010, the top three reasons that bankruptcies were filed include:
- Unexpected expenses/Medical Debt
- An overextension of credit
- Reduction in pay
As one would expect, the number of bankruptcies will vary by state. The states that lack consumer-friendly laws generally have the most bankruptcy filings.
The seven states with the most Chapter 7 and Chapter 13 Bankruptcy filings through the third quarter of 2012 include:
- California
- Nevada
- Utah
- Colorado
- Tennessee
- Alabama
- Georgia
There are several reasons that these states had the highest number of bankruptcies filed. Bankruptcy policies vary by state and some states are more heavily populated than others are.
In 2011, the state of California had the most bankruptcies with over 230,000, which accounted for almost 20 percent of the bankruptcies filed in the United States that year. That same year, Alaska had fewer than 1,000 bankruptcy filings.
The eight states with the least Chapter 7 and Chapter 13 Bankruptcy filings through the third quarter of 2012 include:
- North Dakota
- Hawaii
- Alaska
- Texas
- New Mexico
- South Carolina
- Vermont
- Connecticut
Bankruptcy Requests Increase During Recessions
Previously, more women filed bankruptcy than men did, however, that gap is shrinking. When there are peaks in bankruptcy requests, it usually signifies a downturn in the economy.
From 2006 to 2010, more than half of those filing bankruptcy were between the ages of 35 to 54 years. Caucasian/White men and women file approximately 72 percent of these bankruptcies.
Married individuals are responsible for filing nearly 65 percent of the bankruptcies in 2010. This number also includes those couples who chose to file jointly.
Overall, a decrease is seen in the number of bankruptcies filed from 2011 to 2012. There were nearly 205,000 fewer bankruptcies filed in 2012 than there was in 2011.
A substantial portion (70 percent) of debtors are not college graduates. Authors of a bankruptcy study conducted in 2011 suggest that this is true because these individuals have student loans to pay, but they do not have the benefit of earning higher salaries due to their lack of a college degree.
Repeat Bankruptcy Filers
Some of the more recent studies indicate that approximately 8 percent of individuals who file bankruptcy have filed some kind of bankruptcy in the past. Repeat filers total 16 percent of all the nation’s bankruptcy cases.
While there is a general profile associated with someone who is more likely to file bankruptcy, it is important to remember that no one is immune to the dilemma of financial insecurity.