Pay Attention: Personal Bankruptcy Rate Up

From the St. Louis Federal Reserve Bank: "As evidence of our growing bankruptcy culture, personal bankruptcy filings in the United States increased from 1.2 per 1,000 people in 1980 to over 5.4 per 1,000 people last year, an increase of nearly 350 percent.1 In terms of annual growth, personal bankruptcy filings per 1,000 people have been growing at an average rate of nearly 7 percent, about 1.5 times greater than the average rate of annual per capita GDP growth."

These statistics, however, disguise the fact that personal bankruptcy filings are not equal across the country. For example, at the state level, Tennessee had the highest rate of personal bankruptcy filings in the nation, with over 10 filings per 1,000 persons last year—nearly twice the U.S. rate—whereas Massachusetts ranked last with 2.8 filings per 1,000 people."

The rise and spread of casino gambling since the early 1990s also has been considered to be responsible, in part, for the rise in bankruptcies. However, the research on casino gambling and personal bankruptcy is mixed. The research that does find a positive effect of casino gambling on bankruptcy rates usually finds that this effect is localized and very small—much smaller than the effect from the aforementioned factors.

Read more here.

Interesting state ranking data here.