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American Consumer Credit Counseling Reveals the Hidden Reasons Why Consumers File for Bankruptcy

(PRWEB) April 09, 2013

Most people think of bankruptcy as an avoidable problem that results from lavish spending habits, but that isn’t usually the case. The most common cause of bankruptcy is medical bills, which account for almost half (42 percent) of all filings and which almost always result from crises that are beyond a person’s control according to a study conducted by

Nor is it the case that bankruptcy affects only the uninsured. More than three quarters (78 percent) of people who file for bankruptcy because of medical bills have health insurance, according to a 2009 Harvard University study. In addition, medical-related bankruptcies skyrocketed in the last decade, increasing by nearly 50 percent from 2001 to 2007.

“There’s no reason that seeking treatment in a hospital should lead to out-of-control debt, but that’s the unfortunate reality for millions of Americans every year,” said Steve Trumble, president and CEO of American Consumer Credit Counseling. “It’s very difficult to save up to pay medical bills, because you usually have no warning before an illness or an injury hits. And the cost of care is simply too high for many people to manage.”

After medical bills, the most common cause of bankruptcy is unemployment, which accounts for 22 percent of all filings.

“Like medical emergencies, unemployment often strikes without warning, making it impossible for consumers to prepare for the impending financial hardship,” Trumble says.

According to a study conducted by, the most common causes after unemployment are credit card bills (15 percent) and divorce (8 percent). Unexpected disasters (7 percent) rounds out the top five.

“Other than credit card debt, most of these events are beyond a person’s ability to control,” Trumble said. “Very few people declare bankruptcy because they splurge on cars or luxury vacations. It’s usually because they’ve hit an unexpected rough patch and don’t have enough savings to see their way through it.”

The kinds of crises that lead to bankruptcy can strike anyone, regardless of income or education level. According to a survey conducted by ACCC, more than half (53 percent) of the 1,985 participants who filed for bankruptcy had completed at least three years of college. Fourteen percent of those surveyed had a graduate degree. Another survey by ACCC indicates that of the 2,857 people who filed for bankruptcy, more have a higher annual salary of $60,000 (25 percent) than make $20,000 or less (20 percent).

“Long-term hospital stays can run tens of thousands of dollars, so having a high income doesn’t necessarily protect you from bankruptcy when a major crisis like a medical emergency suddenly strikes,” Trumble said. “The best way to protect yourself is to be prepared for anything. Work out a plan to start saving money now so that, in the future, you’ll be better equipped to weather a financial storm if a disaster occurs.”

American Consumer Credit Counseling’s certified and experienced counselors offer a variety of financial education, counseling and debt management services to help consumers achieve long-term financial health and stability.

ACCC is a 501(c)3 organization, that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

     • For credit counseling, call 800-769-3571
     • For bankruptcy counseling. call 866-826-6924
     • For housing counseling, call 866-826-7180
     • For more information on financial education workshops in New England, call 800-769-3571 x708
     • Or visit us online at

About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a non-profit 501(c)(3) organization dedicated to empowering consumers to achieve financial health through education, counseling, and debt management. ACCC provides individuals with practical solutions for solving financial problems and recognizes that consumers’ financial difficulties are often not the result of poor spending habits, but more frequently from extenuating circumstances beyond their control. As one of the nation’s leading providers of financial education and credit counseling services, ACCC works with consumers to help them with the best plan of action to reduce their debt and regain financial stability. ACCC is accredited by the Better Business Bureau and holds an A+ rating. It is also a member of the Association of Independent Consumer Credit Counseling Agencies. For more information or to access free financial education resources log on to or visit

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