After experiencing a sharp drop in the first quarter of 2006, the rate of bankruptcy filings has begun to rise. The lull in late 2005 and early 2006 is thought to be a result of tough new bankruptcy legislation. Given the recent uptick, however, it looks like the bankruptcy legislation did little more than temporarily stall the flow of new filings.
On average, 1 in 60.16 households nationwide filed for bankruptcy in 2005. Here’s a look at the states with the highest bankruptcy rates:
1. Indiana (1 in 34.41 households filed)
2. Ohio (1 in 37.79 households filed)
3. Utah (1 in 39.52 households filed)
4. Tennessee (1 in 39.7 households filed)
5. Oklahoma (1 in 40.86 households filed)
And here are the lowest rates:
51. South Carolina (1 in 123.16 households filed)
50. Alaska (1 in 122.64 households filed)
49. Vermont (1 in 119.61 households filed)
48. District of Columbia (1 in 115.93 households filed)
47. Hawaii (1 in 109.54 households filed)
To be honest, I was a bit surprised that the top five was completely devoid of states in which the housing market has gone nuts over the past few years. As mortgage rates continue to rise and more and more adjustable rate mortgages start floating that could change dramatically.