Bankruptcy can be a daunting prospect, but for many Kansas City residents, it provides a necessary path to financial recovery. While the reasons behind filing for bankruptcy are often complex and multifaceted, certain common factors tend to drive individuals and families towards this decision. Here, we explore the top five reasons why Kansas City residents file for bankruptcy.

1. Medical Expenses

Unexpected medical emergencies and chronic health conditions are a leading cause of bankruptcy in Kansas City. Despite the presence of health insurance, many individuals face high out-of-pocket costs for treatments, medications, and ongoing care. According to a study by the American Journal of Public Health, medical issues contribute to approximately 66.5% of all bankruptcies in the United States. The burden of medical debt can quickly overwhelm even those with stable incomes, leading them to seek relief through bankruptcy.

2. Job Loss and Unemployment

Economic fluctuations and job market instability have a significant impact on Kansas City residents. The sudden loss of a job can be financially catastrophic, especially if the unemployed individual lacks sufficient savings to cover living expenses during the job search period. Unemployment benefits can help, but they are often not enough to meet all financial obligations, leading many to deplete their savings and accrue debt. This precarious situation frequently results in bankruptcy filings as individuals struggle to manage their finances.

3. Credit Card Debt

Credit card debt is another prevalent reason for bankruptcy in Kansas City. Many residents rely on credit cards to cover basic expenses when their income is insufficient. Over time, the accumulation of high-interest debt can become unmanageable. Factors such as unexpected expenses, poor financial planning, and lack of budgeting skills exacerbate the problem. When credit card debt spirals out of control, bankruptcy often becomes the only viable option to reset finances and start anew.

4. Divorce and Separation

Divorce and separation have profound financial implications that can drive individuals toward bankruptcy. The cost of legal fees, division of assets, and the establishment of separate households can strain finances significantly. Additionally, alimony and child support obligations can further complicate the financial picture. For many Kansas City residents, the financial fallout from a divorce or separation leaves them with no choice but to file for bankruptcy to manage their debts and reorganize their financial lives.

5. Housing Market Issues

Kansas City residents are not immune to the impacts of housing market fluctuations. Economic downturns can lead to decreased property values, making it difficult for homeowners to sell or refinance their homes. For those who have taken on large mortgages, a drop in income or unexpected expenses can make mortgage payments unmanageable, leading to foreclosure. Facing the loss of their homes, many individuals turn to bankruptcy as a means to prevent foreclosure and find relief from overwhelming mortgage debt.


Bankruptcy, while often seen as a last resort, provides a crucial lifeline for many Kansas City residents grappling with insurmountable debt. Medical expenses, job loss, credit card debt, divorce, and housing market issues are among the most common factors driving individuals to file for bankruptcy. Understanding these reasons can help those facing financial difficulties recognize the signs early and seek the necessary support and resources to navigate their way to financial stability. While bankruptcy is not an easy decision, it can offer a fresh start and a path to rebuilding a more secure financial future.

Jason C. Amerine
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President and Owner, Castle Law Office of Kansas City