Journal of Family and Economic Issues

, Volume 40, Issue 4, pp 577–591 | Cite as

Personal Bankruptcy Determinants Among U.S. Households During the Peak of the Great Recession

  • Jonathan BauchetEmail author
  • David Evans
Original Paper


We exploit the longitudinal nature of the 2007–2009 Survey of Consumer Finances to examine whether determinants of bankruptcy identified in the existing literature are applicable to a period marked by a large downturn in the U.S. economy. We develop a framework to organize the literature on the main causes of filing for personal bankruptcy, then test whether these factors held during the 2007–2009 recession by comparing pre-filing characteristics of households who later file for bankruptcy and households who do not file. We find that, when controlling for a large number of individual and household characteristics, relatively few factors were statistically significant when correlated with filing for bankruptcy during the Great Recession. Age and credit card debt were positively associated with filing for bankruptcy. Changes in households’ circumstances (loss of income, retirement, new child in the household) were also statistically significantly associated with filing for bankruptcy. Notably, factors identified in the literature as related to bankruptcy filing were not significant, including income level and negative medical events. The findings help to better understand the complexity of the bankruptcy filing decision, and how to tailor programs and policies to help households deal with financial issues.


Credit card Debt Life-cycle Survey of consumer finances 

JEL codes

D1 D14 K35 



We are grateful to John Grable and Sherman Hanna for helpful comments and suggestions, as well as to participants at the ACCI 2017 Annual Conference. We thank Wilson Amaya and Priyanka Rao for excellent research assistance.

Compliance with Ethical Standards

Conflict of interest

The authors declare that they have no conflict of interest.


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Purdue UniversityWest LafayetteUSA

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