Southern states have highest rates of bankruptcy

Florida is not one of the top 10 states for bankruptcy filings, but several nearby states are. According to an analysis by NerdWallet, states in the south have some of the highest bankruptcy rates in the country. They have remained high in some southern states even as nationwide bankruptcy rates have fallen to their pre-recession levels.

The median bankruptcy rate for all 50 states and the District of Columbia is 226 bankruptcy filings for every 100,000 residents. The highest bankruptcy rate in the country can be found in Tennessee, where there are 553 bankruptcy filings for every 100,000 residents. Alabama is second with 529 bankruptcy filings per 100,000 residents, and Georgia is third with 483 bankruptcy filings per 100,000 residents.

When NerdWallet looked at bankruptcy data by county, eight of the 10 counties with the highest bankruptcy rates were counties in Tennessee, Georgia and Alabama. The county with the highest bankruptcy rate was Shelby County, Tennessee, where there are 1,286 bankruptcy filings for every 100,000 people. Many of the places where bankruptcy rates are high also have some of the nation’s lowest household incomes and very few consumer protections for people with outstanding debt.

Even in states with few consumer protections, bankruptcy can put an end to wage garnishments and other collection attempts. If people cannot afford to make credit card payments but do not want to lose their assets in liquidation bankruptcy, a lawyer may be able to help them file for Chapter 13 bankruptcy. Under this chapter, people who have a reliable source of income can restructure their obligations and repay them over a period of from three to five years under a court-approved plan.