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Tennessee is first in personal bankruptcy filings, report says

Tennessee may have seen a surge in exports and job growth, indicating it is on the right track economically. However, this doesn't disguise a serious fact: according to one report Tennessee is currently leading the nation in personal bankruptcy filings.

The report examined state rates of personal bankruptcy filings spanning from the beginning of April 2015 to the end of March 2016. Tennessee topped the list of all states across the country, with over 550 personal bankruptcy filings per 100,000 residents. Of the personal bankruptcy filings, most of them originated in the Chattanooga and Memphis areas. In comparison, the national median of personal bankruptcy filings was over 220 filings per 100,000 individuals.

According to the report, there were a number of reasons that factored into a state's rate of personal bankruptcy filings. For example, the state's median income could factor into the personal bankruptcy rate. In addition, how strong the state's laws protecting debtors were also factored into the personal bankruptcy rate. Specifically, those states where debtor protection laws were not very strong saw a higher rate of personal bankruptcy filings.

It is important to remember that filing for bankruptcy is not the end of the world. In fact, for some people it is a good step to take to rebuild their financial future. It is possible to rebuild your credit after filing for bankruptcy, along with regaining control of your finances, if the right steps are taken. In the end, debtors who are facing financial challenges and do not know where to turn can consult with an attorney to see if filing for bankruptcy is right for them.

Source: Nashville Business Journal, "Bankruptcy blues: Tennessee leads the nation in personal filings per capita," Aug. 8, 2016

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