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    Posted June 17, 2014 by
    aprilrandle
    Location
    Athens, Tennessee

    Bankruptcy Still A Problem In Tennessee

     

    One of the many results of our country’s recession has been the increase in bankruptcy filings throughout the nation. Many have been faced with impossible situations such as losing their jobs or struggling to find new jobs. Less money is coming in, yet the debt continues to rise. Bankruptcy is a viable option for those looking for a new start. Filing just may save you from losing your home. No one wishes to be found in the position of considering bankruptcy, and luckily, the nation as a whole has decreased the national average of bankruptcy filings over the past few years. Even though the national average has declined, Tennessee has led the nation in bankruptcy filings in recent years.

     

    The National Bankruptcy Research Center (NBKRC) conducts quarterly and yearly studies in the attempt to analyze the trends and statistics associated with bankruptcy filings throughout the United States. According to their study, for the first three quarters of 2012, the national average was reported to have decreased by 14% in comparison with the same three quarters of 2011.

     

    14% is a substantial decrease and is an improvement in which the country should take pride. However, there were four states that were 70% above the national average: Georgia, Nevada, Utah, and at the highest of the four, Tennessee. In fact, a total of nine of the top ten counties with the highest records of bankruptcy filings were found in Georgia and Tennessee. Dena K. Wise, a specialist in economics at the University of Tennessee, has one suggestion for why the bankruptcy rate is so high in places like Tennessee: “If your neighbor does it, it’s more likely you will do it.”

     

    There is a stigma associated with bankruptcy, and that is you must be a failure if you choose to file for bankruptcy. According to Wise, in places like Tennessee, that stigma is broken down as people struggling financially see others take the initiative and pursue bankruptcy themselves. And so, bankruptcy becomes more commonplace and socially acceptable. This trend does not account for what is most likely to be the deciding factor: choosing bankruptcy as a legitimate option for keeping your house, car, and wages while erasing the debts you do owe.

     

    Halfway through 2013, the NBKRC released a mid-year report for bankruptcy filings for the United States. As was the trend in 2012, a decent decrease in filings across the nation was found. According to the report conducted by Ronald Mann of Columbia Law School, bankruptcy filings fell nearly 10,000 in just one month from May 2013 to June 2013. This continued decrease has officially regularized the steady decline since the high reports of 2010. When comparing the reports for the months of June 2012 and June 2013, there was a drop of 17%. The first half of the year of 2013 showed decreases as high as 31% from the first half of 2010. Mann’s findings show that the total filings for 2013 equate to 2.25 million adults which equates to one for every 440 adults.

     

    With this report, Tennessee once again ranked the highest among all states with reports of 4,300 filings per million adults which is still nearly 50% more than the national average. This same report shows that while the nation continues to decrease the number of bankruptcy filings, there is a spread of high rates throughout the Southeast, thus having Tennessee as the state with the highest bankruptcy rate, replacing Nevada which held the top spot for 2010 and 2011.

     

    When considering the entire year of 2013, bankruptcy filings were down by 13% with just a little more than one million filings according to Epiq Systems, Inc. There were 44,111 filings made by businesses which was 24% lower than the rate in 2012. With these reports, the bankruptcy rate is the lowest it has been since 2007 with steady declines since 2010. Samuel Gerdano, Executive Director of the American Bankruptcy Institute, suggests that “annual bankruptcy filings will likely continue to drop amid sustained lower interest rates and high costs to file.”

     

    As of 2013, Tennessee continued to stay on top as the state with the highest rate of bankruptcy filings with an average of 6.59 filings per 1,000 people. That average still is nearly double the national average which is 3.33 filings/1,000. The fact is that many Tennessee citizens find themselves struggling with debt and financial distress, and bankruptcy is a reasonable option for those wishing to keep their homes and cars while eradicating the piling amounts of debt.

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