After experiencing a sharp drop in the first quarter of 2006, the rate of bankruptcy filings has begun to rise. The lull in late 2005 and early 2006 is thought to be a result of tough new bankruptcy legislation. Given the recent uptick, however, it looks like the bankruptcy legislation did little more than temporarily stall the flow of new filings.
On average, 1 in 60.16 households nationwide filed for bankruptcy in 2005. Here’s a look at the states with the highest bankruptcy rates:
1. Indiana (1 in 34.41 households filed)
2. Ohio (1 in 37.79 households filed)
3. Utah (1 in 39.52 households filed)
4. Tennessee (1 in 39.7 households filed)
5. Oklahoma (1 in 40.86 households filed)
And here are the lowest rates:
51. South Carolina (1 in 123.16 households filed)
50. Alaska (1 in 122.64 households filed)
49. Vermont (1 in 119.61 households filed)
48. District of Columbia (1 in 115.93 households filed)
47. Hawaii (1 in 109.54 households filed)
To be honest, I was a bit surprised that the top five was completely devoid of states in which the housing market has gone nuts over the past few years. As mortgage rates continue to rise and more and more adjustable rate mortgages start floating that could change dramatically.
[Source: MSN/Money]
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Living in one of the top 5 states for bankruptcy (UTAH), I believe home prices have gone crazy. Maybe not like other places, but land is going for $250k per 1/3 acre when just a few years ago it went for that with a $180k house on it.
Are these total bankruptcies or just Chapter 7? I believe part of the new legislation was to force more people that could pay to Chapter 13.
I am always shocked yet not surprised by the sheer number of people filing for bankruptcy. This is a true indication of the lack of financial education in this country. A last ditch effort being utilized by so moany people.