Bankruptcy by the Numbers

Who files bankruptcy? You might be surprised.

Drake Bell
Drake Bell. Alberto E. Rodriguez/Getty Images Entertainment/Getty Images

Some time ago, US Weekly reported that Drake Bell, a young star on the Nickelodean network filed bankruptcy, claiming that he's more than $500,000 in debt.  Last year, the notorious Casey Anthony filed bankruptcy after suffering through a months long, very public criminal trial. Even the City of Detroit, and large companies like American Airlines and General Motors seek the protection of the bankruptcy courts.


In calendar year 2013, there were 728,833 Chapter 7 filings and 333,626 Chapter 13 filings in the U.S.  (see the Third Branch News). Not all of them were celebrities.  

If you look at the number of people who have filed bankruptcy over the last thirty years or so and compare those against the number of adults in the country's population, the raw numbers tell us that about 1 in 10 Americans has filed either a Chapter 7 or a Chapter 13 bankruptcy. Astounding, isn't it? Next time you're in church, or sitting on a bus, at a concert, or even the Thanksgiving dinner table, One in ten.  

Can you pick out the likely filers?  

Are they scruffy looking or sickly?  Or are they sitting across from you in the PTA committee meeting? 

Are they old, barely surviving on Social Security?  Or just finishing college with their careers shining ahead of them?  

Are they urban single mothers with five kids under ten?

 Or are they suburban couples with two teens in private school (plus four car payments and three mortgages)?

Here are some Interesting facts that might shed some light on who actually files for bankruptcy and why.  

According to the book The Fragile Middle Class: Americans In Debt (by, among others, the esteemed Sen.

Elizabeth Warren while she was still a professor at Harvard Law School):

  • Two thirds of bankruptcy filers have lost a job.
  • Half of all bankruptcy filers have significant medical debt.
  • Ninety-one (91%) of filers have suffered a job loss, medical event or divorce.
  • Forty-four percent (44%) of bankruptcy filings are couples filing together.
  • Thirty percent (30%) of bankruptcy filers are women filing alone; twenty-six percent (26%) are men filing alone.
  • The average age of a bankruptcy filer is 38.
  • Most bankruptcy filers are better educated than the general population.
  • The states with the highest bankruptcy rates are Tennessee, Utah, Georgia and Alabama.

Here's more:

  • According to the Senate Committee on Banking, Housing and Urban Affairs, the fastest growing group of bankruptcy filers are 25 years of age or younger.  (See A Generation Indebted:  Young Adult Debt Across Three Cohorts).
  • 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) (See The New Bankruptcy Law).
  • In 2002, more people declared bankruptcy than graduated from college:  (See more stats on financial literacy from Wartburg College).

    Really, there is no "typical" bankruptcy filer.  People file bankruptcy at all ages and for many reasons. Some file to rid themselves of overwhelming medical or credit card debt, to save a precious asset like a house, or to manage high interest car loans or even student loans.  

    And, it is never too early to start teaching your children about money.  A great place to start is the Kids & Money page.  

    For more information about Paying for College, I recommend reading Saving for College.