While Tennessee’s economy is healthy, a recent report revealed that it also leads the nation in personal bankruptcy filings. From the beginning of April 2015 to the end of March 2016, Tennessee had the highest rate of personal bankruptcies in the United States at a rate of rate of 553 filings per 100,000 residents. The median for the same time period in the U.S. was 224 filings per 100,000 people.
Personal bankruptcy rates depend on several factors, including median income and consumer protection laws in the state. States with fewer consumer protections tend to see more bankruptcy filings, including filings to protect household goods and wages. Fortunately, there are several bankruptcy options that can help struggling consumers enjoy a fresh financial start and future.
The two primary options for personal bankruptcy are liquidation bankruptcy and wage-earner bankruptcy. A Chapter 7 liquidation bankruptcy allows the filing party to liquidate non-exempt assets to repay creditors and enjoy debt relief. A Chapter 13 bankruptcy allows the filing party to reorganize their debts so that they can be repaid according to a more manageable repayment plan worked out with the help of the court and approved by the court. Each option is intended to provide struggling consumers with options that can help reduce the stress associated with overwhelming debt.
There are specific requirements to qualify for different types of personal bankruptcy, so it is important to thoroughly understand the options available and what each option entails when considering filing for bankruptcy. Given the strain that can be associated with debt struggles, it is important to residents in Tennessee to be familiar with the options available to them to help.
Source: Nashville Business Journal, “Bankruptcy blues: Tennessee leads the nation in personal filings per capita,” Aug. 15, 2016