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The state of Georgia has the third highest bankruptcy rate in the country. According to the Atlanta Journal Constitution, one in 50 households in Georgia declared bankruptcy in the first 11 months of 2009. The National Bankruptcy Research Center's statistics show that federal bankruptcy courts in Georgia handled 66,925 filings from January to November 2009, a 22 percent increase over 2008. The NBRC's report states that on a national scale, there were nearly 1.3 million personal bankruptcy filings between January and November 2009 -- a staggering 32 percent over 2008. The states with the highest household-adjusted filing rates are Nevada, which comes in at two and one-half times the national average, followed by Tennessee, Georgia, Alabama and Indiana. The lowest filing rates occurred in Alaska, which came in at less than a third of the national average, followed by the District of Columbia, North Dakota, South Carolina and South Dakota, all less than half the national average.
Experts have attributed the increase in bankruptcy filings to high unemployment, a real estate meltdown and creditor-friendly laws among the biggest factors. Georgia's position near the top of the list is nothing new. It has occupied this position for years because it is a very creditor-friendly state. Georgia's foreclosure laws have played a big role in the decision of many filers. The state's foreclosure process occurs without court or government supervision and takes approximately two weeks. That's quite the opposite of what occurs in the other states. That's a real shame that Georgians who face foreclosure are literally forced into bankruptcy because of this process.
According to NBRC, more than half of the filings by Georgians between January and November 2009 were for Chapter 7, which is liquidation that essentially wipes out most debts, but some assets are not protected by exemptions. Approximately 47 percent of filers in Georgia opted for Chapter 13, in which consumers are allowed to keep a house and car, but requires a restructuring of their debts to repay a portion to creditors, usually on a percentage for unsecured creditors -- two percent of the balance of a credit card, for example.
This trend is expected to continue as the economic conditions continue to dog the United States and unemployment rates remain high.
Experts have attributed the increase in bankruptcy filings to high unemployment, a real estate meltdown and creditor-friendly laws among the biggest factors. Georgia's position near the top of the list is nothing new. It has occupied this position for years because it is a very creditor-friendly state. Georgia's foreclosure laws have played a big role in the decision of many filers. The state's foreclosure process occurs without court or government supervision and takes approximately two weeks. That's quite the opposite of what occurs in the other states. That's a real shame that Georgians who face foreclosure are literally forced into bankruptcy because of this process.
According to NBRC, more than half of the filings by Georgians between January and November 2009 were for Chapter 7, which is liquidation that essentially wipes out most debts, but some assets are not protected by exemptions. Approximately 47 percent of filers in Georgia opted for Chapter 13, in which consumers are allowed to keep a house and car, but requires a restructuring of their debts to repay a portion to creditors, usually on a percentage for unsecured creditors -- two percent of the balance of a credit card, for example.
This trend is expected to continue as the economic conditions continue to dog the United States and unemployment rates remain high.
