In a somewhat surprising turn of events, bankruptcies are down, by and large. Most observers expected a bankruptcy tsunami, given the tumultuous economy of the past two years. However, an explosion of bankruptcy cases has simply not occurred, and a dramatic drop in bankruptcy cases occurred in 2021.
According to the American Bankruptcy Institute, in 2020, 1.71 people in a 1,000 filed for Chapter 7 and Chapter 13 bankruptcy, but in 2021, that number fell to 1.29. From 2016 to 2019, this per capita bankruptcy rate was about 2.5. This approximate 30% plunge in filings from 2019 to 2020 was blamed on government benefits and eviction and foreclosure moratoriums. And, as our St. Petersburg, Florida, readers can see, those numbers only continue to decline into 2021 and possibly 2022.
Not uniform numbers
Of course, these numbers are not uniform throughout every state. Alabama saw a spike of bankruptcy filings per capita with 3.13 filings per 1,000 residents, but they have been the state with the highest bankruptcies since 2017. On the other end of the spectrum is Alaska, with only 0.31 filings per 1,000 residents.
Top and bottom
After Alabama (3.13) is Nevada (2.57), Tennessee (2.40), Indiana (2.17), Georgia (2.12), Mississippi (2.03), Kentucky (2.00), Utah (1.97), Florida (1.96) and Delaware (1.83). At the other end of the rankings is Alaska (0.31), Vermont (0.44), Maine (0.48) and the District of Columbia (0.50).
Where does Florida rank?
As readers can see, Florida is number 9 with 1.96 filings per 1,000 residents. For our St. Petersburg, Florida, readers, a key takeaway is that, even though bankruptcy rates are down nationally, that is not necessarily the case in Florida. So, for those that feel like they are drowning in debt, take the financial lifeline of Chapter 7 or 13 bankruptcy.