Bankruptcy

Georgia Among Top Five in Bankruptcy Filings Per 1000 Residents

By Jonathan

Filing bankruptcy reshapes America.

This chart from the EconomicCrisisBlog.com graphically illustrates what many of us in the Atlanta area already know – Georgia has one of the nation's highest rates of bankruptcy filings.

Why is this and why has it been this way for years – long before the current recession?  From my perch as an Atlanta debtor's attorney, I believe that the following factors contribute to our state's high filing rate:

• most people in Atlanta are not from Atlanta.  As such, they do not have close family nearby who can help out with a loan or with a place to stay
• the economy in Atlanta is and has been primarily a service economy, with an emphasis on communications, IT infrastructure, and transportation.  These industries tend to move through boom and bust cycles more quickly than the economy in general, making jobs in these areas less stable
• Atlanta is a young, somewhat flashy city that encourages conspicuous consumption.  As a metropolitan hub, Atlanta exploded in the 1970's meaning that most of the suburbs are 20 to 30 years old.  There really isn't much "old money" here – and the entrepreneurial class that drives much of the region's business is inherently less financially sound
• bankruptcy filings tend to breed more bankruptcy filings.  When you look at the total numbers of filings over the past 20 years, the totals add up to more than the total population of the metro Atlanta area!  Now, obviously some folks have moved elsewhere but I sense that in general, the idea of filing a bankruptcy in Atlanta is seen as a financial tool rather than a badge of personal failure
• there is a lot of information out there about filing for and recovering from bankruptcy.  Information empowers people to understand their options and to make reasoned choices.  Although bankruptcy is and should be considered a last resort, it can offer a fresh start for honest, hardworking people who are facing an otherwise unmanageable financial crisis

Can you think of other reasons why Atlanta and Georgia have such high filing rates – I'd love to hear from you.

Full post as published by The BK Blawg on December 05, 2009 (boomark / email).