If you're living in Tennessee, you may have been one of many people who struggled with the recession. Unfortunately, Tennessee has not recovered as well as some parts of the country, and it's still leading the country in bankruptcy filings. Although bankruptcy is an option if you find yourself in over your head with debt, it's only one of many paths you can take, which your attorney can speak with you about.
One good thing, according to the Jan. 10 report, is that the number of people filing for bankruptcy in Tennessee is dropping for the sixth consecutive year. However, this doesn't mean the state is doing as well as other parts of the nation. In Chattanooga, the number of bankruptcies that were filed in 2015 was down 2.3 percent, but that isn't as good as the national average. Nationwide, bankruptcies dropped a dramatic 10 percent and were at the lowest levels since 2006, before the recession.
Bankruptcies may rise in the future, but if they do, it's because those who have been through bankruptcies or been affected by the recession may finally have a chance to recover and take on more debt. As they purchase homes and interest rates increase, this poses a threat to debtors who then could find themselves in a situation of overwhelming debt once again.
Another thing to consider is that as interest rates climb and people have more money coming in, they can afford to file for bankruptcy and may want to start with a fresh financial outlook. This can cause bankruptcies to rise overall. Topped with a rise in student debt, it's possible to see more people filing for bankruptcy protection, even though those loans won't be able to be dismissed in bankruptcy in most cases.
Source: Times Free Press, "Tennesssee still leads nation in bankruptcies," Dave Flessner, Jan. 10, 2016