Struggling in Financial Crisis: The story and trend behind the bankruptcy phenomenon in the United States

The new book "Debt Control: Risk and Consumer Bankruptcy," co authored by Robert M. Lawless, a law professor at the University of Illinois, delves into the difficult financial lives of American bankruptcy applicants and presents worrying trends and issues behind them. Through 11 years of bankruptcy data, the book not only presents a large number of statistical figures, but also uses specific personal stories to help readers understand the fundamental reasons for bankruptcy and their real experiences living in financial difficulties.

True portrayal of financial fragility

The book 'Control of Debt' highlights the financial fragility of American households. Professor Lauris pointed out that the financial situation of many families is extremely unstable, and any sudden expenses or health problems may lead to the entire family falling into bankruptcy. The book mentions that medical debt, credit card debt, student loans, car loans, mortgages, and other factors are the main causes of bankruptcy. Moreover, bankruptcy is not only caused by improper personal consumption, but also exacerbated by the unequal socio-economic structure.

The group trend of bankruptcy applicants

In recent years, the group of bankruptcy applicants in the United States has shown some new trends, especially the significant increase in the proportion of women and minority groups. Especially for single mothers with children and the black community, the bankruptcy rate is much higher than other groups. Laurie explained that this is closely related to gender and racial wealth inequality. The huge socio-economic differences are often reflected in bankruptcy courts, with factors such as poverty, low education levels, and serious health problems making these groups more susceptible to bankruptcy.

Medical debt: the top culprit of bankruptcy

Health issues remain one of the main reasons for bankruptcy in the United States, and although the healthcare insurance system has improved since the enactment of the Affordable Care Act, the problem of healthcare debt has not been fundamentally resolved. Professor Lauris pointed out that many job positions no longer provide high-quality medical benefits, and the popularity of the gig economy has made it difficult for many people to enjoy sufficient welfare protection. Especially when unable to work due to illness, income interruption can lead to a backlog of bills, which may ultimately result in bankruptcy applications. Even worse, many people may have to turn to unconventional credit methods such as high interest loans and payday loans when they urgently need to pay for daily living expenses such as rent and food, which undoubtedly exacerbates the deterioration of their personal finances.

Bankruptcy stigmatization and lack of social support

Although bankruptcy is a necessary choice in many people's lives, it is still a social stain in the United States. About one million people apply for bankruptcy every year, and according to statistics, one in every 11 Americans has experienced bankruptcy in his life. Due to the stigmatization of bankruptcy in society, many people choose to exhaust their retirement savings in difficult situations rather than seeking bankruptcy protection. Many people are not aware that their retirement accounts are actually protected after bankruptcy, and by the time they consult a lawyer, their savings are almost depleted.

The rise of bankruptcy among the elderly

Another worrying trend is that the proportion of elderly people aged 65 and above among bankruptcy applicants is increasing. In the past 30 years, many elderly people's retirement income has become unstable and their pensions have shrunk. This means that many elderly people do not have enough savings to cope with the pressure of retirement and even need to bear student loan debt, as they often guarantee loans for their children or loved ones. Compared to young people, older adults lack opportunities to rebuild their income and savings, and bankruptcy is an insurmountable challenge for them.

The fragility of American household finances

Professor Lauris and his team hope readers can understand that bankruptcy is not the result of some people's extravagance or failure, but a complex issue influenced by multiple socio-economic factors. From excessive reliance on credit, health issues, insufficient retirement savings, to the stigmatization of bankruptcy, these factors collectively exacerbate the financial fragility of American households. In today's social environment, more and more people are living in constantly rising financial risks, and bankruptcy courts have become their last refuge.

Overall, 'Controlling Debt: Risk and Consumer Bankruptcy' not only reveals the complex reality behind US bankruptcies, but also calls for society to pay more attention and understanding to this phenomenon, reduce bias against bankrupts, and provide more support for those in need.