Federal and credit bureau data show these places are the most common sites of bankruptcy.
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Editor’s Note: This story originally appeared on Smartest Dollar.
The COVID-19 pandemic provided an unexpected financial boost to many in the U.S., but with the economy potentially facing a recession, households and businesses could have challenging months and years ahead. And after years of encouraging downward trends, this could mean that bankruptcies in the U.S. will once again be in focus.
The pandemic’s impact on consumer debt was one pleasant economic surprise. Amid government stimulus payments and forbearance policies, increased savings during COVID-19 shutdowns, and a tight labor market with opportunities for wage growth, Americans have made strong progress in paying down debt over the last two years.
But more recently, with inflation eating into budgets, lenders raising interest rates, and some industries seeing major layoffs, households are starting to feel greater financial pressures that could make it harder to keep up with debt payments.
To determine the states with the most bankruptcies in 2021, researchers at Smartest Dollar calculated the number of bankruptcies per million residents. The data used in this analysis is from the Administrative Office of the U.S. Courts, U.S. Census Bureau, and Experian.
Here are the states with the most bankruptcies per capita.
The data used in this analysis is from the U.S. Census Bureau’s American Community Survey (2020), the Administrative Office of the U.S. Court’s Bankruptcy Filings Statistics, and Experian’s FICO Credit Score by State dataset.
To determine the states with the most bankruptcies, researchers at Smartest Dollar calculated the number of bankruptcies per million residents. The number of bankruptcies are for the year 2021, while population data is from 2020, which is the latest data available. Note, the unemployment rates used for the analysis are for ages 16 and older.
Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.
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