Written by attorney Timothy S. Kingcade

Top 10 Leading Causes of Bankruptcy

In the southern district of Florida, 31,989 people filed for personal bankruptcy in 2012 and 36,847 in 2011. However, the factors that cause people to file for bankruptcy can be very different. See below for the top ten leading causes of filing for personal bankruptcy.

  1. Medical Bills: Medical debt is the leading cause of bankruptcy in the United States. Studies show that 42% of all personal bankruptcies are the result of medical bills.

  2. Job Loss: Approximately 22% of those who file for personal bankruptcy attribute their financial troubles to their unemployment.

  3. Uncontrolled Spending: Credit card bills, mortgages and car payments contribute to approximately 15% of bankruptcies in the United States. Many Americans are forced to file for bankruptcy protection every year due to uncontrolled spending habits.

  4. Divorce: Divorce can be very expensive when there are legal fees, child support payments, alimony payments and the burden of providing for a household on only one income. Divorce attributes to 8% of bankruptcy filings in the United States.

  5. Unexpected Disasters: Around 7% of personal bankruptcies are the result of an unexpected disaster such as an earthquake, flood or hurricane. Many Americans cannot recover from debt surrounding a natural disaster due to a lack of homeowners or renters insurance.

  6. Avoiding Foreclosure: Many people have filed for bankruptcy protection in order to avoid their home from being foreclosed on. Approximately 1.5% of Americans reportedly file for bankruptcy to stay in their homes.

  7. Poor Financial Planning: Nearly 1.5% of Americans who file for bankruptcy protection are forced to do so because of poor financial planning.

  8. Preventing Loss of Utilities: One percent of families file for bankruptcy protection in order to keep their utilities on, such as electricity.

  9. Student Loans: Student loans are not typically dischargeable debt when filing for bankruptcy; however, the minimum payments can be so high that the individual is forced to file for bankruptcy to eliminate other debt. One percent of Americans attribute their bankruptcy to student loans.

10.Preventing Repossession: One percent of Americans file for bankruptcy in order to have repossessed items returned to them or to avoid repossession altogether.

Additional resources provided by the author

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at

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