For the past several years, Utah has had the dubious distinction of having one of the highest bankruptcy filing rates in the country. In 2004, for example, nearly one in every 41 families in Utah filed for bankruptcy — about twice the national average. Is it the Mormons?
People in Utah have higher educational levels. The dominant religion — the Church of Jesus Christ of Latter-day Saints — preaches the importance meeting financial responsibilities and warns against debt. So why are so many people in Utah in financial trouble? Some point a finger at Mormon practices such as early marriage, large families, and tithing. But a new study says no: Mormons in Utah are slightly less likely to file for bankruptcy than non-Mormons. The researchers, Jim Wright and Zeke Johnson, say the problem lies elsewhere.
The researchers discovered that what distinguished Utah debtors from their counterparts around the country was the higher-than-average proportion who identify job problems and medical debts as triggering their bankruptcies. Wright and Johnson then tie those problems into a ragged social safety net (weaker health care coverage) and economic troubles (employment problems). Those challenges leave all Utah families — Mormon and non-Mormon alike — vulnerable for financial collapse when trouble strikes.
The high bankruptcy filing rate in Utah is has an O’Henry political twist. During the debates over the credit industry’s amendments to the bankruptcy laws, one of the most aggressive supporters of the credit industry bill was Orin Hatch, the senior Republican senator from Utah. He helped moved the bill forward, as he denounced the deadbeats who filed for bankruptcy. Many people pointed out that his own constituents had one of the highest filing rates in the country, a point Hatch never acknowledged as he crusaded for the credit industry.
Senator Hatch’s approach carried the day on the bankruptcy legislation. If lots of families file for bankruptcy, blame the families. Don’t look at other social and economic factors that might be causing trouble.
Are Mormons different? By Senator Hatch’s logic, they must be. But not according to Wright and Johnson’s research. Like families everywhere, they struggle with the economic fallout from medical difficulties and job loss. And when they can’t get good jobs or decent health care coverage, their problems may sweep them into bankruptcy.
