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Law Office of David A. Semanchik July 3, 2019

In the United States, debt citizens face continues to grow. According to the Federal Reserve, nearly 80% of Americans are in debt or have been in debt at some point in their lives. Are American’s simply overspending or is there more to the debt crisis?

Here are the most common debts causing Americans to file for bankruptcy.

  • Medical bills. Medical bills are the number one reason U.S. citizens file for bankruptcy. In fact, about 67% of all bankruptcies are due to the high cost of care or the time away from work due to recovery.

  • Unaffordable mortgage. The second most common reason Americans file for bankruptcy is because of their mortgage. According to a study from Harvard University, almost 40 million Americans live in houses they cannot afford. Individuals may have higher mortgage costs than they can afford because the housing market prices continue to rise but wages have not.

  • Excess spending. Some Americans simply do not control their spending. Car payments, credit card bills, and other loan payments may cause your debt to spiral out of control. Initially, people are able to pay the minimum but after doing that for so long the interest builds and Americans are not able to pay off the debt. In addition, Americans simply cannot afford to finish paying off all of their debts because they keep spending, making bankruptcy inevitable.

New Jersey residents have even more debt than the typical American. According to, the average U.S. citizen is $47,500 in debt while the typical New Jerseyan is $62,300 in debt.

If you have more debt than you can afford and would like a fresh start, consider filing for bankruptcy.