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Personal bankruptcy: common causes and current outlooks

On Behalf of | Mar 30, 2018 | Bankruptcy

The word “bankruptcy” is a frightening one to most Pennsylvania consumers. No matter how it got to that point, discovering that one’s financial situation is in a predicament is, indeed, an overwhelming experience. While each person’s economic situation may vary from the next, what are some common causes of bankruptcy, and what might America’s outlook on the topic look like?

Many are aware of the infamous culprit behind countless bankruptcy cases: medical debt. TIME’s Money looks at the ways Obamacare helped reduce personal bankruptcy significantly — in fact, the Affordable Care Act decreased filings by 50 percent. Numbers went from 1,536,799 in 2010 to 770,846 in 2016. The biggest factor at play in that high number of bankruptcy filings involved uninsured or underinsured Americans. Regardless of the level of coverage from the ACA, Money points out that this program offered a significant amount of protection to all consumers; an improved housing market also played a role in improving bankruptcy statistics in the nation.

USA Today sheds light on unemployment rates — another side of personal financial crisis. Currently, African American and veteran workers have had a particularly difficult time finding steady employment; however, the unemployment rates for these groups have dropped. Despite growing struggles in today’s job market, the rate of unemployed black workers has dropped from 7.2 percent to 6.8 percent. Nevertheless, unemployment rates for black Americans is higher than that of all other ethnic groups in the nation. Unemployment rates for veteran workers dropped to 3.3 percent in recent months. Whether it is prolonged medical debt, unemployment or other type of money-related stressor, filing bankruptcy can open the door for many who grapple with life’s financial toils.