Deborah Thorne

Illness and injury as contributors to bankruptcy.

In 2001, 1.458 million American families filed for bankruptcy. To investigate medical contributors to bankruptcy, we surveyed 1,771 personal bankruptcy filers in five federal courts and subsequently completed in-depth interviews with 931 of them. About half cited medical causes, which indicates that 1.9-2.2 million Americans (filers plus dependents) experienced medical bankruptcy. Among those whose illnesses led to bankruptcy, out-of-pocket costs averaged dollar 11,854 since the start of illness; 75.7 percent had insurance at the onset of illness. Medical debtors were 42 percent more likely than other debtors to experience lapses in coverage. Even middle-class insured families often fall prey to financial catastrophe when sick.

Managing the Stigma of Personal Bankruptcy

Abstract In recent years, the relationship between personal bankruptcy and stigma has generated much discussion and speculation. However, virtually no research has examined the experiences of bankrupt debtors themselves. In this paper, we provide an analysis of bankruptcy stigma based on thirty-seven in-depth interviews with 19 married couples who filed for personal bankruptcy in 1999. The data demonstrate that stigma is a pervasive feature of contemporary personal bankruptcy and that bankrupt debtors rely upon a wide range of stigma management techniques employed by other stigmatized groups. We conclude by considering the implications of our findings for continued research on personal bankruptcy in the U.S. and for understanding, more broadly, the strategies and struggles for social agency among stressed and marginalized populations.

Debtors' Assessments of Bankruptcy Financial Education

Bankruptcy law now requires individuals to complete a financial education class to receive a discharge of debts. Using data from the 2007 Consumer Bankruptcy Project, this chapter examines debtors’ attitudes about the value of financial education. The data show that debtors’ attitudes vary by race, educational attainment, age, and familiarity with household finances. While many debtors express optimism about the future benefits of financial education, only about one in three debtors believes financial education could have prevented their bankruptcy. These findings have implications for designing financial education curricula and for understanding the causal relationship between financial distress and financial knowledge.

The (Interconnected) Reasons Elder Americans File Consumer Bankruptcy

Since the early 1990s, the age distribution of the bankruptcy population has shifted. Specifically, the age distribution curve has flattened, due in large part to an increase in the number of elder Americans (65 and older) who are filing bankruptcy. To date, the reasons for elder bankruptcies have not been studied. Quantitative and qualitative data from 381 elder bankruptcy respondents who participated in the 2007 Consumer Bankruptcy Project suggest that overwhelming interest and fees on credit cards, illnesses and injuries, income problems, aggressive debt collectors, and housing problems are the leading reasons that elder debtors file bankruptcy. Further, the vast majority of elder bankruptcies result not from a single cause, but rather from multiple interconnected causes.

Financial Stumbles, Consumer Bankruptcy, and the Sociological Imagination

For many undergraduates, applying the sociological imagination to financial failure can be exceptionally difficult. Like most Americans, they adhere to the “bootstrap” analogy of financial security and success. To overcome this narrow and non-sociological perspective, I introduce students to several financial stumbles that are common and that result primarily from structural factors and shifts. Ultimately, they learn about consumer bankruptcy as a culminating event of several of these smaller stumbles. I also rely on students’ stories of their family’s financial collapse—these normalize the failure and because they are so personal, encourage other students to think about how easily something similar could happen to them.