There are counties in the state of Georgia that have consistently been ranked as having some of the highest rates of Chapter 7 bankruptcy in the country.
At one point, the state ranked second behind only Nevada in the incidents of personal bankruptcy, according to the Atlanta Journal-Constitution.
Recent indicators, however, suggest that Georgia’s fortunes statewide went on the upswing in the month of August, as only four counties—all in the Atlanta area—made the list of the top 10 counties in terms of bankruptcy frequency. This is according to August 2010 data from the National Bankruptcy Research Center. The center analyzes data from Columbia Law School professor Ronald Mann.
More good news came with the finding that the number of personal bankruptcies filed in the courts in Georgia’s northern district had decreased in June and July of 2010, as compared with the same months in 2009.
In addition to high rates of bankruptcy, Georgia has led the way in home foreclosures and bank failures as well. All of these can likely be connected back to the collapse of the Atlanta housing market three years ago, at the beginning of the economic recession, according to the Journal-Constitution.
While the news about personal bankruptcies in Georgia was good, the gains were small. The drop from last year’s figures were in the range of 1 to 6 percent. But any drop in rates is good news for a state that watched bankruptcy rates rise at double-digit rates not so long ago and for the last four years.
The trend in Georgia is mirroring to some degree the numbers on a nationwide level. Across the country bankruptcy filings were down by 7 percent in August. Year-to-year, though, nationwide bankruptcies are still 12 percent higher than they were last August.
The factors that have led to the latest rise are tough to pin down. Experts are unsure whether the August numbers are just a “blip” as the article calls, or whether it’s an indicator of more long term improvement.
“It’s too early to tell,” Jack Williams told the Journal-Constitution. He studies bankruptcy at Georgia State University’s Law School. “The people in the field are as busy as ever.”
There are a couple of reasons for the Atlanta area’s higher bankruptcy rates.
Typically cities like Atlanta ,where lots of people move into and out of the area, are hotbeds for bankruptcy filing.
Also, particular banking laws pertaining to bankruptcies that allow quick-moving foreclosures lead to more people filing for bankruptcy to keep the bank from taking over their homes. In Georgia, banks are able to foreclose on homes in as little as 37 days.
Last year’s high unemployment rates and the continuing real estate crash last year led to more and more bankruptcies. A few of those factors have improved somewhat since then.
The jobless rate in Georgia dropped a bit, from 10.3 percent in June to 10.2 percent in July. This rate is still higher than the 9.6 percent national rate. Local mortgage delinquency rates have also dropped slightly, for the third straight quarter. These rates are also higher than the national rates.
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