Bankruptcy isn’t something a person sets out to experience in their lifetime, but as economic times continue to challenge us more people are requiring the protection it can offer. Over the years, bankruptcy statistics have revealed some interesting patterns in bankruptcy filings, but one thing stays the same: there will always be people who need its protection due to unforeseen life events.
Recent studies show that one in five Americans have enough medical debt to make keeping up with payments challenging or impossible. It is estimated that each of these Americans is carrying medical debt burdens over $10,000. Medical debt is also the reason for 60 percent of all bankruptcy filings. One of the problems is the lack of affordable health care options for a large majority of Americans. Self employed or small business owners have a difficult time securing affordable healthcare and the unemployed find it nearly impossible to get approved.
Student Loan Debt
Rapidly becoming a key player among bankruptcy filers, student loan debt is now estimated to be a one trillion dollar industry. Over two-thirds of all college graduates carry student loan debt when they graduate. The average graduate owes $25,000 or more in student loans and it is estimated that close to half of these graduates will default on their loans at some point in their lives. In today’s job market, graduates simply cannot find the type of employment they were promised in exchange for getting their education. Unemployed or underemployed, these graduates cannot afford to make their loan repayments.
Credit Card Debt
One of the most commonly held sources of debt among Americans, credit card debt has reached all time highs during the peak of the recession. The average family carries three to five credit cards and the average balance is over $5,000. Even a balance this small can take upwards of four or more years to pay off at the minimum balance. While credit card debt isn’t the big player in bankruptcy for most people, it becomes a slippery slope when job loss or divorce hits a family unexpectedly. Living off of credit cards to survive is a habit that many people can’t avoid when times get tough.