The Causes of Consumer Bankruptcy in the US

Cheap Credit Scores and Debt Accumulation: One of the primary causes of consumer bankruptcy is a lack of financial literacy. Many individuals struggle to manage their debt, leading to accumulation of credit card balances, medical bills, and other unpayable debts.

Medical Debt and Insurance Issues

An estimated 20% of consumer bankruptcies are due to medical debt. The high costs of healthcare, coupled with limited access to affordable insurance options, can lead to financial ruin for individuals who experience unexpected illnesses or injuries.

Foreclosure and Homeowner Assistance Programs

The foreclosure crisis in the US led to a significant increase in consumer bankruptcy filings. The Troubled Asset Relief Program (TARP) and other government-backed mortgage programs aimed to prevent foreclosures, but some homeowners were unable to obtain assistance or were forced into foreclosure.