The number of bankruptcy filings in the United States has steadily increased over the last century, and especially so from 1980 to 2005.
In fact, bankruptcy filings hit an all-time high in 2005, when more than 2 million cases were started. In that year, one out of every 55 households went broke.
But the following year, bankruptcy filings dipped to about 600,000, the lowest point in 20 years.
Sadly, nowadays the vast majority of bankruptcies are filed by consumers, not by businesses. In 1980, for example, businesses accounted for 13 percent of cases. Today, they account for about 3 percent.
According to a 2018 study, 66.5 percent of all American bankruptcies were tied to medical issues —either because of high costs for care or time out of work.
The researchers found that roughly 530,000 families turn to bankruptcy every year because of medical issues and bills.
Other reasons include unaffordable mortgages or foreclosure, at 45 percent, closely followed by spending or living beyond one's means, at 44.4 percent, providing help to friends or relatives, at 28.4 percent, student loans, at 25.4 percent, or divorce or separation, at 24.4 percent.
“Unless you’re Jeff Bezos, people don’t have very good alternatives, because the insurance that is available and affordable to people, or that most people’s employers provide them, is not adequate protection if you’re sick,” a co-author of the research, Dr. David U. Himmelstein, a distinguished professor at Hunter College and founder of advocacy group Physicians for a National Health Program, said.
Most families do not have enough saved for a simple emergency, let alone thousands of dollars in unexpected medical costs.
Over three-quarters of all full-time workers are living paycheck to paycheck, according to a report from jobs site CareerBuilder, and just 40 percent of Americans are able to cover an unexpected $1,000 expense with their savings, according to another survey from personal finance website Bankrate.
So sadly, it looks like we will see a lot more similar tweets in the future as well.
