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Since the 1960s, the state of Utah has consistently ranked in the top quarter of bankruptcy rates in the USA. By the 1980s, Utah was already in the top 10 states, reaching the number 5 “worst” state before 1990. In 2002 and 2003, Utah emerged in the top position with the highest household bankruptcy rates. For instance in the end of March, 2004, one in every 36.5 Utah household filed for bankruptcy, becoming again the highest percentage for householder in the nation (Dave Anderton 2004, Online). In general, there are many theories on the causes of bankruptcy throughout the USA: “Job loss, divorce, overspending, excessive debt, poor financial management skills, disability, substance abuse, insufficient income, lack of health insurance and high housing costs” (“Bankruptcy rate caused by credit problems” 2005, Online). But what in reality is causing Utah to have the number one bankruptcy rate? According to the “Utah Foundation Press Release” (December 15, 2004), the economic factors that may play a strong role in Utah's bankruptcy problem include “. . . larger than average families and homes, low wages, high home prices, and high charitable commitments . . .” (Online). Easy credit and the “local legal culture” also make Utah very susceptible to bankruptcies (Farnsworth, 2004, online).
To better understand the bankruptcy problem in Utah, there are a few statistics that are important to mention. From an article by Dr. Jean M. Loan and Dr. Barbara R. Rowe (2002) I have gathered the following statistics:
1. Size of families in Utah are on average 3.57 persons compared with 3.14 for the U. S. as a whole, becoming the largest families in the nation (qtd. in U. S. Census Bureau, online).
2. “The State has the youngest population with a median age of 27.1.”
3. Per capita income in Utah, for the year of 1995 was $18,054. This is 76.6% of the national average, “. . . placing it 45th of the 50 states.”
4. Utah women wages are 62% of males wages, when compared to the 75% of the rest of the USA to cause it to become “. . . the largest gender gap in the nation” (qtd. in Utah Dept of Employment Security 2001, online).
5. “The cost of raising children to age 18 continues to climb to almost a quarter of a million dollars (qtd in Lino 2001, online). With an average of one half more persons per household, the high cost of raising children is a significant financial factor for Utah families.”
6. Adding to all these numbers, Utah has the largest home sizes in the country as well as the most number of cars per family (qtd. in Loomis 2001, online). “More than one-fourth of Utah homes contain eight or more rooms” (qtd. in "Utah leads nation" 2001, online).
In conclusion, economists speculate that large family size, with all the costs associated with it, and low per capita income contribute to Utah’s high bankruptcy rate (Overbeck 2001, online).