A Demographic Overview of the American Bankruptcy Consumer

A Demographic Overview of the American Bankruptcy Consumer

A profile of bankruptcy demographic trends from 2006-2010

A glimpse at demographic trends from 2006-2010

A glimpse at demographic trends from 2006-2010

What are the demographics of the American bankruptcy consumer? Are these demographics changing? In 2010 the Institute for Financial Literacy, whose goal is to promote effective financial education and counseling, completed a study that set out to answer these questions.


In this study of data over 5 years (2006-2010), they looked into trends and common traits in those that have recently filed bankruptcy. They used data from 2010 bankruptcy filers (around 52,851 surveys performed) and compared it with data from 2006-2009.


You may find reading their full report very interesting. Here is a brief summary of what their study revealed about demographic trends among bankruptcy filers and how their findings can help you understand your target market better.


Males and females seem to have little difference in their propensity towards filing bankruptcy. Around 52.26% of all filers in 2010 were women, while 47.74% were male. Since 2006, this ratio has been fairly consistent. However, there has been a gradual, slight increase in male filings over the last 5 years and a decrease in female filings over the same period. As the ratio comes closer to 50:50, this means that there is no significant difference as to whether males or females are more likely to file bankruptcy.

Gender of Bankruptcy Filers


The age of bankruptcy filers varies dramatically and the mix of ages has changed significantly over time as well. Those under 24 or over 65 are the least likely to file bankruptcy, while those ages 35-54 make up over 50% of all filers. In the last 5 years, there has been a shift in the age makeup of bankruptcy filers, with those ages 25-44 filing less and those ages 45-64 filing more. This means that the bulk of your target market are those between 35-54, but you shouldn’t overlook other age groups as a part of your target market.

Bankruptcy Filers Ages


Whites consistently make up over 70% of all bankruptcy filings from year to year, while African Americans and Hispanics account for around 20% of filings. Over the last 5 years, African Americans’ bankruptcy filing rates have decreased significantly, while rates among Asians and Hispanics are rising. These trends are bringing bankruptcy rates among races more in line with their proportional nationwide populations. This means that race isn’t necessarily a large determining factor in whether or not a person files bankruptcy. However, it is useful to understand that most of your target market will likely be white, while Hispanics and Asians are a growing market that you shouldn’t overlook.



There is a wide variety in the level of education of bankruptcy filers. Around 70% of all bankruptcy filers either have no college education or only some college education (haven’t graduated). However, in the last 5 years, more people with a Graduate, Bachelor’s, or Associate’s degree are filing bankruptcy.

Education of Filers


About 75% of bankruptcy filers earn less than $40,000 a year, while about 38% earn less than $20,000. In the last few years, however, there has been a significant increase in the amount of bankruptcies among those making more than $60,000 a year.

Income of Bankruptcy Filers


Only about 16% of 2010 bankruptcy filers were unemployed. The Great Recession brought about two main changes in the employment makeup of bankruptcy filers. First, as unemployment levels rose across the country, unemployment became a significant factor leading towards more people filing bankruptcy. Second, business owners began to struggle and began to file bankruptcy in greater numbers.

Employment of Bankruptcy Filers

Marital Status

Around 64% of all bankruptcy filings come from married couples. 34% of these couples file jointly instead of individually. Interestingly, the amount of filings from married couples has increased significantly in the last 5 years, while it has decreased for those who are single.

Marital Status of Bankruptcy Filers

Causes of Financial Stress

The most common factors that lead people to file bankruptcy are overextension of credit, unexpected expenses, reduction of income, job loss, and illness or injury. With the Great Recession, job loss and reduction of income became more prevalent financial burdens leading towards bankruptcies.

Causes for Filing Bankruptcy

In summary, there are core demographic factors (gender, race, etc) about bankruptcy filers that remain relatively constant over time. You can use these factors to help you determine your marketing strategy. However, as the economy changes over time, you may see fluctuations in demographics of your target market that you can use to adjust and refine your marketing. The better you stay apprised about demographic trends, the more effective your marketing will be.


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