Tennessee Bankruptcy Rate Leads Nation
According to the Associated Press in June 2008 Tennessee is now the number one bankruptcy state! To quote,
According to a report released last week by the Federal Deposit Insurance Corp., the rate of personal bankruptcy filings in Tennessee during the first quarter of 2008 was more than double the national average. Neighboring Georgia and Alabama ranked second and third, respectively. Economists say they don't see much improvement.
"Tennessee tied for dead last in per capita income growth last year...With the rise in gas and food costs, a lot more people are going to have trouble making ends meet, and I suspect we'll see even more bankruptcy filings..." The National Bankruptcy Research Center estimates that one of every 56 households will file for bankruptcy relief this year in Tennessee...
One of the main problems in Tennessee is low wage scales and refusal of business to hire college graduates. To quote Tennessee Gov. Bredesen:
"Well, I don't think our community college system does a wonderful job of aligning what it's doing with the real needs of the workplace. One thing I'm interested in exploring is any kind of joint effort where a community college can help train people in exchange for some honest attempts on your part to employ them when they're done."
For more on this problem see Why your college degree is worthless in Tennessee
Tennessee bankruptcy rate per capita still leads the nation
Tennessee continued its streak of having the highest per-capita rate of bankruptcy filings in the U.S. during fiscal year 2008, as numbers re leased Wednesday showed 6.92 filings per 1,000 people according to The Tennessian August 28, 2008.
The total number of bankruptcy filings rose to 42,893, an increase of 18.6 percent compared with 2007. The eastern district (Tri-Cities region) was up 30.8% from last year. Some expert argue the methods use to tabulate the numbers might be some of the cause. To quote, "there's no clear reason why the state has persistently led the nation in bankruptcy filings...the bulk of those were for Chapter 13, a court filing under which a person's debts are restructured...Tennesseans repay about $160 million to creditors, out of about $6 billion paid annually in the U.S."
The 6th District includes Kentucky, Michigan, Ohio and Tennessee the total came to 167,561, up 21.2 percent in the past year. The 9th District, which includes California, Arizona and Nevada, which are among the states hardest hit by the housing meltdown had a whopping 60.9%. increase.
Another problem is the mass hiring of illegal aliens and the refusal to enforce the law.
See Illegal Alien Driver pleads guilty to wrong-way wreck, illegal employers to blame
Update December 2007: As of the first quarter 2006 Tennessee was ranked 4th. (Bankruptcy filings (most recent) by state)
Ref: American Bankruptcy Institute and http://www.statemaster.com/graph/eco_ban_fil-economy-bankruptcy-filings
But Bankruptcy filings (per capita) (most recent) by state:
#1 Tennessee: 1.099 per 1,000 people #2 Georgia: 0.953 per 1,000 people #3 Alabama: 0.809 per 1,000 people #4 Michigan: 0.661 per 1,000 people #5 Arkansas: 0.643 per 1,000 people #6 Indiana: 0.609 per 1,000 people #7 Kentucky: 0.542 per 1,000 people #8 Mississippi: 0.538 per 1,000 people #9 Missouri: 0.534 per 1,000 people #10 Ohio: 0.512 per 1,000 people #11 Illinois: 0.482 per 1,000 people #12 Louisiana: 0.455 per 1,000 people
As of yet, we don't know the impact of the subprime meltdown for Tennessee. To quote Subprime Loan Crisis Jolts U.S. Economy by Heide B. Malhotra Epoch Times Washington, Sep 11, 2007:
"The combined threat of subprime loan defaults and excessive indebtedness has supplanted terrorism and the Middle East as the biggest short-term threat to the U.S. economy," according to NABE. The above assertion may not be so far fetched. Banks across the United States reported in the most recent Mortgage Bankers Association (MBA) National Delinquency Survey that a large number of their subprime mortgage loans were not being repaid. Banks in Ohio were hit hardest. They had twice the number of loans in default or homes in foreclosure than banks in any other state. Payment delinquencies are also on the rise in Indiana, Illinois, Kentucky, Tennessee and Pennsylvania...
Tennessee tops nation in personal bankruptcyNovember 23, 2003 Kingsport Times-News extract. ...Tennessee ranked first in the nation in per capita personal bankruptcy filings in 2002 with 1,078 cases of bankruptcy for every 100,000 people. That figure marked a 4.3 percent increase from 2001...Tennessee also ranks 8th in the nation in total bankruptcy filings, with 63,028 filed in 2002.
Judge Parsons, who has served as bankruptcy judge for the Northeast District of Tennessee for 10 years, said she sees about 400 cases a month, a figure that has risen 23 percent in the past decade. Since the bankruptcy court opened in Greenville 10 years ago, Parsons said there have been 33,141 cases go through the court.
"I think it says something about the state of the economy in Tennessee and the low wages paid," Parsons said. "It takes both the husband and wife working, and when one of them loses their job, usually there's no savings to tide them over. "Tennessee also has an extremely high divorce rate, and often divorces are followed in six months by bankruptcy because the family had a hard enough time supporting one household and now they have an even harder time supporting two households."
Instead of addressing poverty wage scales in East Tennessee:
Parsons said she thinks the key to reducing the number of bankruptcy filings is through education. "I think there needs to be more education, explaining in the high schools and in colleges the cost of credit, the dangers of credit cards, and what the true cost of credit really is," Parsons said.
"I don't think everyone understands that if you miss a payment, there's a large charge and they can increase the interest rate for credit. "It could take you years to pay that $3,000 credit card bill...It's all walks of life. The majority of people in Tennessee are working class or middle class, so that's what I have...I see tons more credit card debt..."
Parsons said there is also a real danger on college campuses when colleges contract with credit card companies to solicit to students...Parsons said she advises people to cut up their credit cards and not incur any more debt while in bankruptcy.
She said she worries about the state of the bankruptcy filings in Tennessee. "I see a lot of young couples just because they're trying to pay for home, cars and kids," Parsons said. "In the last three years I've seen more Chapter 11 filings than in the beginning of my career."
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