15 States Where Most People File For Bankruptcy

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Editor’s Note: This story originally appeared on smartest buck.

The COVID-19 pandemic has given many people in the United States an unexpected financial boost, but with the economy potentially facing a recession, households and businesses could have tough months and years ahead. And after years of encouraging downtrends, that could mean US bankruptcies will once again be front and center.

The impact of the pandemic on consumer debt has been a pleasant economic surprise. Amid government stimulus payments and forbearance policies, increased savings during COVID-19 shutdowns, and a tight labor market with opportunities for wage growth, Americans have made solid progress in debt repayment over the past two years.

But more recently, with inflation eating away at budgets, lenders raising interest rates and some industries suffering major layoffs, households are starting to feel increased financial pressures that could make it harder to pay off their debts.

To determine the states with the most bankruptcies in 2021, Smartest Dollar researchers calculated the number of bankruptcies per million residents. The data used in this analysis comes from the US Courts Administrative Office, the US Census Bureau and Experian.

Here are the states with the most bankruptcies per capita.

15.Missouri

Branson, Missouri
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  • Bankruptcies per million inhabitants (2021): 1,590
  • Business bankruptcies per million inhabitants (2021): 24
  • Non-commercial bankruptcies per million inhabitants (2021): 1,566
  • Average Credit Score (2021): 711
  • Unemployment rate (2020): 4.5%

14.Wisconsin

Madison, Wis.
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  • Bankruptcies per million inhabitants (2021): 1,598
  • Business bankruptcies per million inhabitants (2021): 33
  • Non-commercial bankruptcies per million inhabitants (2021): 1,565
  • Average Credit Score (2021): 735
  • Unemployment rate (2020): 3.6%

13. Illinois

Chicago, Ill.
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  • Bankruptcies per million inhabitants (2021): 1,647
  • Business bankruptcies per million inhabitants (2021): 43
  • Non-commercial bankruptcies per million inhabitants (2021): 1,604
  • Average Credit Score (2021): 719
  • Unemployment rate (2020): 6.0%

12.Michigan

Detroit, Michigan
Harold Stiver / Shutterstock.com
  • Bankruptcies per million inhabitants (2021): 1,697
  • Business bankruptcies per million inhabitants (2021): 25
  • Non-commercial bankruptcies per million inhabitants (2021): 1,671
  • Average Credit Score (2021): 719
  • Unemployment rate (2020): 6.0%

11.Delaware

Wilmington, Delaware
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  • Bankruptcies per million inhabitants (2021): 1,723
  • Business bankruptcies per million inhabitants (2021): 691
  • Non-commercial bankruptcies per million inhabitants (2021): 1,031
  • Average Credit Score (2021): 714
  • Unemployment rate (2020): 5.8%

10.Utah

Utah
By Fotoluminate LLC / Shutterstock.com
  • Bankruptcies per million inhabitants (2021): 1,769
  • Business bankruptcies per million inhabitants (2021): 25
  • Non-commercial bankruptcies per million inhabitants (2021): 1,745
  • Average Credit Score (2021): 727
  • Unemployment rate (2020): 3.6%

9.Ohio

Columbus, Ohio
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  • Bankruptcies per million inhabitants (2021): 1,783
  • Business bankruptcies per million inhabitants (2021): 30
  • Non-commercial bankruptcies per million inhabitants (2021): 1,753
  • Average Credit Score (2021): 715
  • Unemployment rate (2020): 5.3%

8. Arkansas

Little Rock, Arkansas
Henryk Sadura / Shutterstock.com
  • Bankruptcies per million inhabitants (2021): 1,824
  • Business bankruptcies per million inhabitants (2021): 41
  • Non-commercial bankruptcies per million inhabitants (2021): 1,783
  • Average Credit Score (2021): 694
  • Unemployment rate (2020): 5.2%

7. Georgia

Atlanta, Georgia, autumn skyline from Piedmont Park
Sean Pavone / Shutterstock.com
  • Bankruptcies per million inhabitants (2021): 2015
  • Business bankruptcies per million inhabitants (2021): 45
  • Non-commercial bankruptcies per million inhabitants (2021): 1,970
  • Average Credit Score (2021): 693
  • Unemployment rate (2020): 5.6%

6.Kentucky

frankfurt kentucky
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  • Bankruptcies per million inhabitants (2021): 2,038
  • Business bankruptcies per million inhabitants (2021): 24
  • Non-commercial bankruptcies per million inhabitants (2021): 2014
  • Average Credit Score (2021): 702
  • Unemployment rate (2020): 5.4%

5. Mississippi

Gulf Coast in Biloxi, Mississippi.
Joseph Sohm / Shutterstock.com
  • Bankruptcies per million inhabitants (2021): 2,068
  • Business bankruptcies per million inhabitants (2021): 50
  • Non-commercial bankruptcies per million inhabitants (2021): 2018
  • Average Credit Score (2021): 681
  • Unemployment rate (2020): 7.1%

4.Indiana

Indianapolis, Indiana
Alexei Stiop / Shutterstock.com
  • Bankruptcies per million inhabitants (2021): 2,163
  • Business bankruptcies per million inhabitants (2021): 29
  • Non-commercial bankruptcies per million inhabitants (2021): 2,134
  • Average credit score (2021): 712
  • Unemployment rate (2020): 4.7%

3. Tennessee

Chattanooga, TN
Kevin Ruck / Shutterstock.com
  • Bankruptcies per million inhabitants (2021): 2,280
  • Business bankruptcies per million inhabitants (2021): 33
  • Non-commercial bankruptcies per million inhabitants (2021): 2,247
  • Average Credit Score (2021): 701
  • Unemployment rate (2020): 5.3%

2. Nevada

Reno, Nevada
Don Mammoser / Shutterstock.com
  • Bankruptcies per million inhabitants (2021): 2,308
  • Business bankruptcies per million inhabitants (2021): 75
  • Non-commercial bankruptcies per million inhabitants (2021): 2,234
  • Average Credit Score (2021): 701
  • Unemployment rate (2020): 6.6%

1.Alabama

Huntsville Alabama Cityscape Skyline
By Sean Pavone / Shutterstock.com
  • Bankruptcies per million inhabitants (2021): 3,053
  • Business bankruptcies per million inhabitants (2021): 32
  • Non-commercial bankruptcies per million inhabitants (2021): 3,021
  • Average Credit Score (2021): 691
  • Unemployment rate (2020): 5.6%

Methodology

A man studies financial data on his computer
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The data used in this analysis comes from the US Census Bureau American Community Survey (2020)United States Court Administrative Office Bankruptcy filing statisticsand Experian FICO Credit Score by State database.

To determine the states with the most bankruptcies, Smartest Dollar researchers calculated the number of bankruptcies per million residents. The number of bankruptcies is for the year 2021, while the demographic data is for 2020, which is the latest data available. Note that the unemployment rates used for the analysis relate to persons aged 16 and over.

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