Understanding the Memphis Bankruptcy Rates
If you need to file bankruptcy in Memphis, you aren’t alone. For a lot of different reasons, our city and state have a high filing rate.
Tennessee Ranks High for Bankruptcy
According to Experian, in 2021, the state of Tennessee ranked 5th in the country for consumer (personal) bankruptcy.
On average, 1.1 out of every one thousand people in TN filed bankruptcy. What’s worse: the average Tennessee household had $83,508 in debt. This includes medical bills, student debt, credit cards, and more.
In general, bankruptcies have been going down nationwide over the last couple of decades and plummeted during COVID. But that wasn’t true for the state of Tennessee. We were one of the only states in the country to report a rise in bankruptcies in 2021, along with our close neighbors Louisiana and Mississippi.
Memphis and Chattanooga were the biggest centers for bankruptcy filings. According to one study, Shelby County had a bankruptcy rate of 1,286 per 100,000 residents. That’s the highest rate of any county in the U.S.
Memphis Rates Affected by Tennessee Law
When we hear about these high rates, it’s easy to blame the wrong people. You may be tempted to think “Memphians must be worse with money than anywhere else in the country!”
That’s just not true. Plenty of large cities have their own intense financial problems. Look at homelessness in California, the impossible cost of living in New York, and devastating medical and student debt everywhere. Consider the struggles of rural communities that have lost their industrial centers. Looking at the numbers, Memphis shouldn’t have that much of a higher rate than these other communities.
Instead, studies show rates increase based on the strength or weakness of a state’s debtor protection laws. States with higher rates of bankruptcy often allow creditors to behave worse than other states. When a creditor can take your home, car, or wages more easily, you choose to get out of debt faster and in whatever way you can.
“Typically states with less protection see more filings,” according to Courtney Miller of NerdWallet. “Tennessee is one of those states. It’s not the worst, but it’s not among the best.”
How to Use Bankruptcy to Change Your Life
Some experts see how many people file bankruptcy in Memphis and worry it’s a “feedback loop.” They say it’s a bad sign when people have to file bankruptcy multiple times.
First off, we shouldn’t blame people for doing exactly what they’re supposed to do when they can’t pay back their debts any more. Bankruptcy is designed exactly for this purpose.
We should think before we judge people who are just trying to get by despite overwhelming medical bills, low pay, unforgiving state laws, and all sorts of other problems. If you think people who file bankruptcy deserve our shame, you should check out our free report What Does the Bible Say About Bankruptcy?
Secondly, bankruptcy can be a true fresh start. You can actually get out of debt and stay out, and we can help.
For decades, we’ve helped people in Memphis change their lives with this powerful legal tool. They’ve kept their family home so their kids can stay in a stable school environment. When creditors come for the only car they have, we’ve helped them save it so they can get to work. We’ve helped people rebuild their credit scores, start over with new apartments and jobs, and get a new lease on life without the anchor of debt.
What’s more, we’ve seen many people stay out of debt permanently. They just needed a little help to get there.
We can help you, too. If you’re struggling with debts you can’t pay, give us a call at 901-327-2100 or fill out the form below. The conversation is completely free.