Bankruptcy By The Numbers: Demographics Of Chapter 7 Debtors


BANKRUPTCY BY THE NUMBERS


CONTRIBUTING EDITORS: ED FLYNN, Executive Office for United States Trustees
& GORDON BERMANT, Burke, Virginia

DEMOGRAPHICS OF CHAPTER 7 DEBTORS:

     As part of its ongoing research effort, the Office of Research and Planning of the Executive Office obtained a sample of 1,452 recently closed no-asset chapter 7 cases, most of which were originally filed in late 1998 or early 1999. The cases were gathered from 60 of the 84 federal judicial districts served by the United States Trustee Program in proportion to the number of chapter 7 cases filed in each district during 1997. We reviewed the petitions to determine the gender, marital status and family size of each of the debtors. The results are as follows:




FEMALE (INDIVIDUAL)


MALE
(INDIVIDUAL)

JOINT FILING


UNKNOWN


TOTAL
TOTAL CASES 502 428 507 15 1,452
-- MARRIED 74 82 484 - 640
-- SEPARATED 32 29 22 - 83
-- DIVORCED 126 86 1 2 215
-- SINGLE* 241 226 - 13 480
-- WIDOWED 29 5 - - 34

* It is likely that some of the debtors who reported themselves as single were actually separated, divorced or widowed.

     Filings by females and joint filings each account for about 35% of the total, while filings by males accounted for the remaining 30% of cases. About 44% of the debtors were married, 23% were previously married (separated, divorced or widowed), and the remaining 33% reported themselves as single.

     There are significant financial differences among the male, female, and joint debtors. Joint debtors have more dependents, much higher combined incomes, higher unsecured debt levels, and are much more likely to be homeowners than either individual male or female filers. Their debt-to-income ratios(1) tend to be a little lower than individual filers.

     Individual male debtors have higher incomes than individual female filers. Individual female debtors are far more likely to have dependents than male debtors. However, one-quarter of the individual male filers reported alimony or child support payments on schedule J of their petitions.



FEMALE

MALE

JOINT
AVERAGE FAMILY SIZE 2.01 1.51 3.59
PERCENT WITH DEPENDENTS
(OTHER THAN SPOUSE)

47.0%

23.1%

75.0%
PERCENT DISABLED OR RETIRED 13.7% 11.4% 9.6%
PERCENT HOMEOWNERS 27.7% 26.9% 51.3%

GROSS INCOME
AVERAGE
MEDIAN


$19,716
$18,012

$23,928
$21,420

$37,992
$34,632
UNSECURED DEBT
AVERAGE
MEDIAN

$29,503
$19,613

$39,464
$21,925

$44,527
$27,725
MEDIAN UNSECURED + PRIORITY DEBT-TO INCOME RATIO
1.23

1.04

.91
CHILD SUPPORT/ALIMONY
PERCENT PAYING
AVERAGE AMOUNT PAID/YEAR

2.8%
$78

22.2%
$1,176

8.7%
$417

     The following chart shows the same information for three sub-groups of unmarried chapter 7 debtors: males with no dependents, females with no dependents and females with dependents.

 
UNMARRIED MALES - NO DEPENDENTS

UNMARRIED FEMALES - NO DEPENDENTS

UNMARRIED FEMALES WITH DEPENDENTS
NUMBER OF CASES 303 239 189
PERCENT OF ALL CASES 20.9% 16.5% 13.0%
PERCENT DISABLED OR RETIRED 12.9% 21.3% 7.9%
PERCENT HOMEOWNERS 25.4% 28.5% 25.4%
GROSS INCOME
AVERAGE
MEDIAN

$21,912
$19,800

$17,112
$15,792

$20,760
$19,236
UNSECURED DEBT
AVERAGE
MEDIAN

$35,996
$21,700

$34,172
$20,639

$24,953
$17,970
MEDIAN UNSECURED + PRIORITY DEBT-TO INCOME RATIO
1.14

1.51

.94
CHILD SUPPORT/ALIMONY
PERCENT PAYING
AVERAGE AMOUNT PAID/YEAR

25.4%
$1,387

2.5%
$53

3.2%
$94

    As a group the females with no dependents had lower incomes, higher debt-to-income ratios, and were more likely to be disabled or retired. The income levels of the unmarried females with dependents were about the same as the unmarried male debtors. Home-ownership rates were comparable among the three sub-groups.

     More than one-quarter of the unmarried male debtors report making child support or alimony payments. These payments amount to 6.3% of this group's total income, and 19.9% of the income of those who are required to make payments.

     Most unmarried debtors would be eligible for chapter 7 under pending means testing proposals. Only about 12% of the unmarried debtors in our sample exceed the gross income threshold in H.R. 833; and application of the IRS expense Guidelines would allow many of the higher income debtors to remain eligible for chapter 7.


* This article originally appeared in the American Bankruptcy Institute Journal, Vol. XVIII, No. 7, September 1999. It is reprinted with permission of the American Bankruptcy Institute.

1. Total priority and general unsecured debt listed on Schedules E and F divided by 12 times gross monthly income from all sources listed on schedule I.


Updated May 7, 2015