Personal bankruptcy rate in the United States, by state September 2019

As of September 2019, Tennessee had the highest personal bankruptcy filing rate in the United States. In Tennessee, 496.8 inhabitants per 100,000 had filed for bankruptcy. In comparison, Alaska had the lowest bankruptcy filing rate, where 52.34 inhabitants per 100,000 filed for bankruptcy.

Filing for bankruptcy

Bankruptcy is a legal process that occurs when a person, business, or organization does not have enough money to pay for all of its debts. Personal bankruptcy happens for a multitude of reasons, with one of the biggest factors being medical debt. Corporate bankruptcy happens when businesses fail or because of financial distress. When a person cannot pay off their debts, a professional accountant is appointed as a trustee in bankruptcy. Their assets are frozen and then sold in order to pay off as much of the person’s debts as possible. When an organization can’t pay back its debts, a liquidator is appointed by the court. None of their assets are protected, so everything is sold. In 2017, Kmart had the largest Chapter 11 bankruptcy filings in the United States in terms of assets.

U.S. bankruptcy

Between July 1st, 2018 and June 30th, 2018, California had the largest number of bankruptcy filings in the United States, while Alaska had the lowest. The number of non-business bankruptcy filings has been decreasing since 2010. Since 2009, the annual number of business bankruptcy cases has also been decreasing.