Question: Is it true that Utah has the highest personal bankruptcy rate in the United States?

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Question: Is it true that Utah has the highest personal bankruptcy rate in the United States?

Utah's high bankruptcy rate is not explained by the large numbers of LDS members in Utah

Is it true that Utah has the highest personal bankruptcy rate in the United States? If so, what does this say about Mormon attitudes toward wealth and materialism?

Utah's high bankruptcy rate is not explained by the large numbers of LDS members in Utah. All things being equal, being LDS reduces the risk of filing for bankruptcy. Critics who point to Utah's bankruptcy rate in order to condemn the Church are not portraying the data honestly.

In 2002, Utah's personal bankruptcy rate is the highest in U.S. According to an August 2002 Associated Press article: [1]

Utah residents are more likely to file for bankruptcy than residents of any other state, according to a financial research organization.

During the year ending March 31 [2002], roughly one of every 35 Utah households filed for bankruptcy, according to the American Bankruptcy Institute, a Virginia-based research organization. That far outpaced the national average of one for every 69 households.

However, the reasons for this are complex, as the article went on to explain:

There's no simple explanation, financial experts say.

Some point to obvious factors: Utah's per-capita income ranks 45th in the nation. Its families, many of them part of the Mormon faith, are larger than those in other states. The job market is weak. The cost of living is relatively high.

The state is also the nation's youngest — the median age is 27.1, compared to 35.3 nationally — and its birth rate is the highest. That means fewer workers are supporting more people.

Experts say it may be that people in Utah are living closer to the financial edge, so they struggle when hard times or a crisis arrives.

"Most of the time, the problem arises not because of wild consumerism, but because something really bad happens," said Darren Bush, an economist and law professor at the University of Utah.

And while Utah may have the highest bankruptcy rate, nationwide the overall rate is climbing, according to the article:

Utah may be hardest hit, but it is hardly alone. A record 1.5 million people filed for bankruptcy in the United States the past year. Filings for the second quarter of 2002 were also a record: more than 400,000, the most ever, according to the American Bankruptcy Institute.

Bush noted that irresponsible spending and over-reliance on credit cards contribute to financial distress.

"Utahns don't save, just like the rest of the nation doesn't save. The first line of defense is credit cards," Bush said.

Mormons less likely to file for bankruptcy

According to a 2007 study published in the Suffolk University Law Review:

Cultural characteristics often attributed to Mormons and The Church of Jesus Christ of Latter-day Saints do not account for Utah's bankruptcy rates. In fact, certain aspects of this culture, such as [Church] employment services and [Church] welfare, may even be shielding Mormons from the full brunt of Utah's current bankruptcy environment. [2]

In a Deseret News interview with the study's authors, one of them noted:

Our findings show that all Utahns, including Mormons, are suffering from an enormous bankruptcy glut, but Mormons are not experiencing it any more than any other Utahn. Our data reveal that in Utah non-Mormons are 4.6 percent more likely than their Mormon counterparts to find themselves in bankruptcy court. [3]

Counsel of LDS Church leaders

The advice and teaching of LDS general authorities has been consistent since the foundation of the Church: Latter-day Saints should get out of debt and stay out of debt. In October 2001 General Conference, President Gordon B. Hinckley taught:

The economy is particularly vulnerable. We have been counseled again and again concerning self-reliance, concerning debt, concerning thrift. So many of our people are heavily in debt for things that are not entirely necessary. When I was a young man, my father counseled me to build a modest home, sufficient for the needs of my family, and make it beautiful and attractive and pleasant and secure. He counseled me to pay off the mortgage as quickly as I could so that, come what may, there would be a roof over the heads of my wife and children. I was reared on that kind of doctrine. I urge you as members of this Church to get free of debt where possible and to have a little laid aside against a rainy day. We cannot provide against every contingency. But we can provide against many contingencies. [4]

Utah's high bankruptcy rate can be blamed, in part, on the failure of some Latter-day Saints to heed prophetic counsel.

Elder Dallin H. Oaks also cautioned members of the Church against the lures of materialism and "get-rich-quick" schemes:

Some have charged that modern Latter-day Saints are peculiarly susceptible to the gospel of success and the theology of prosperity. According to this gospel, success in this world—particularly entrepreneurial success—is an essential ingredient of progress toward the celestial kingdom. According to this theology, success and prosperity are rewards for keeping the commandments, and a large home and an expensive car are marks of heavenly favor. Those who make this charge point to the apparent susceptibility of Utahns (predominantly Latter-day Saints) to the speculative proposals of various get-rich-quick artists. They claim that many Utahns are gullible and overeager for wealth.

Certainly, Utah has had many victims of speculative enterprises. For at least a decade there have been a succession of frauds worked by predominantly Mormon entrepreneurs upon predominantly Mormon victims. Stock manipulations; residential mortgage financings; gold, silver, diamonds, uranium, and document investments; pyramid schemes—all have taken their toll upon the faithful and gullible. Whether inherently too trusting or just naively overeager for a shortcut to the material prosperity some see as the badge of righteousness, some Latter-day Saints are apparently too vulnerable to the lure of sudden wealth.

Objective observers differ on whether Latter-day Saints are more susceptible to get-rich-quick proposals than other citizens. However that may be, it is disturbing that there is no clear evidence that Latter-day Saints are less susceptible. Men and women who have heard and taken to heart the scriptural warnings against materialism should not be vulnerable to the deceitfulness of riches and the extravagant blandishments of its promoters. [5]


  1. "Utah residents are more likely to file for bankruptcy than residents of any other state,", 23 August 2002.
  2. Ezekial Johnson and James Wright, "Are Mormons Bankrupting Utah? Evidence from the Bankruptcy Courts," Suffolk University Law Review 40/3 (2007): 633. PDF link
  3. "No LDS bankruptcy link? Study says nonmembers have more money woes," Deseret Morning News, 28 June 2007. off-site
    (See also "LDS faith, bankruptcy: No link," Salt Lake Tribune, 28 June 2007. off-site)
  4. Gordon B. Hinckley, "The Times in Which We Live," Ensign (November 2001), 9. off-site off-site
  5. Dallin H. Oaks, Pure in Heart (Salt Lake City: Bookcraft, 1988), 83–84.