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Personal bankruptcies rates have remained historically low in the past few years. Read on to find out bankruptcy rates by state, what you should do if you’re facing bankruptcy and how to maintain good credit.

How to understand bankruptcy rates

When discussing bankruptcy, it’s important to know that there are several main types of personal bankruptcies.

Chapter 7: Requires asset liquidation and is mostly used by individuals who don’t have sufficient funds to pay off their debt. It offers the complete elimination of certain types of existing debt.

Chapter 13: Reserved for individuals with a regular income. It stipulates a debt repayment plan not to exceed five years.

The simplest way to understand bankruptcy rates is that they represent the number of people who—for whatever reason—were unable to pay their debt and sought relief. Most filers choose either Chapter 7 or Chapter 13, depending on their personal circumstances.

Chapter 7 allows for the discharge of certain types of debt without repayment but may result in asset forfeiture. Conversely, Chapter 13 requires a payment plan and in exchange, filers can typically retain ownership of certain assets, such as their home.

What does the bankruptcy landscape look like in 2022?

After rising steadily from the 1980s to the early 2000s, bankruptcy rates hit a new record in 2005 at over 2 million cases. Since then, the numbers have largely declined, and in 2021, fewer than half a million bankruptcies were filed. This downward trend has continued through early 2022, with bankruptcy rates remaining lower than in previous years.

However, bankruptcy rates are starting to inch back up after historic declines. With pandemic-related aid receding and inflation rising, households are feeling the squeeze, and bankruptcy rates are expected to continue to rise throughout 2022.

Bankruptcy rates by state

These are the bankruptcy rates by state for 2021, according to the American Bankruptcy Institute. In 2021, there were a total of 397,069 bankruptcies filed. *Cases included in totals reference commercial business as part of bankruptcy petition filing.

The first thing to consider when you’re facing bankruptcy is to consider alternative steps you can take to avoid filing for bankruptcy if you’re struggling to pay your debt.

Things to consider if you are facing bankruptcy

1. Debt settlement

A debt settlement is an agreement you make with your creditors to reduce the balance owed and pay a lump sum as opposed to monthly installments. This is an alternative to bankruptcy that is generally reserved for unsecured debts, such as credit cards and medical bills. Generally, secured debts are ineligible for settlement.

Debt settlement often facilitated by a for-profit company that charges a fee on the original debt amount and then serves as an intermediary between you and the original creditor by collecting payment and holding the money in escrow. The debt settlement company negotiates on your behalf to secure more favorable repayment terms and conditions.

2. Debt consolidation

Debt consolidation is the process of combining multiple debts into one and refinancing at a lower interest rate. This type of refinancing works for high-interest unsecured debts, such as credit cards. You can effectively achieve debt consolidation by either taking out another loan to cover your debt or by borrowing against other assets, such as your home or your 401(k).

3. Hire a lawyer

A lawyer is one expense you don’t want to spare when facing bankruptcy. A bankruptcy lawyer can guide you through the process of filing for bankruptcy and help you understand what to expect. They’ll gather information about your financial situation and represent you at any hearings related to your case.

4. Prepare for credit counseling

Before you can file for most bankruptcies, you’ll need to attend credit counseling, which is required by the U.S. Department of Justice. In this session, a certified credit counselor will “review your income and expenses, discuss alternatives and help you develop a personal budget.” (Debt.com)

Credit counselors also evaluate your ability to repay your debt and confirm your need to file for bankruptcy. The Department of Justice maintains a database of approved credit counseling agencies for individuals pursuing bankruptcy.

5. Understand the long-term consequences of filing for bankruptcy

While bankruptcy is almost never desirable, it’s not all bad news. Bankruptcy can provide a viable path out of overwhelming debt and offer relief from debt collectors’ persistent communication.

However, be aware that filing for bankruptcy doesn’t necessarily mean an automatic blank slate, and you may see negative impacts on your life and finances long after you file. These may include:

• Difficulty renting an apartment or getting hired for a job
• Your bankruptcy proceedings are public records and discoverable by anyone
• Your credit will be adversely impacted for up to 10 years

How to work on your credit

No matter if you are considering bankruptcy or not, never forget that your credit can benefit from good money habits and staying in control of your finances. Here are a few helpful tips for working on your credit.

1. Set up automatic payments

Paying your bills on time is one of the oldest and most helpful tricks in the book for keeping your credit healthy. By turning on automatic payments, you can be sure you won’t miss a payment and get hit with a late fee, which can hurt both your bank account and your credit score. Some companies even offer you a discount for using automatic payments.

2. Become an authorized user on another account

You can benefit from a friend or family member’s healthy financial practices by becoming an authorized user on their account. The basis of this method is that your credit gets a boost by them simply keeping on top of their bills while you’re connected to their account. Make sure the person you choose has a strong credit history and that they report you to the credit bureaus as an authorized user. Who can be added varies by creditor, so this isn’t an option for everyone.

3. Leave old accounts open

Even if you’re no longer using a credit card, it may still make sense to keep the account open. Doing so could help bolster your credit score by increasing the amount of credit you have available and decreasing your credit utilization ratio. Generally speaking, the longer an account is open in good standing, the more it helps your overall credit history.

As bankruptcy rates rise, you can avoid becoming another statistic by developing effective ways to manage debt or stay out of it entirely. Cultivate positive financial habits and consider working with CreditRepair.com to use their experience to help get your credit back on track.

The first thing to consider when you’re facing bankruptcy is to consider alternative steps you can take to avoid filing for bankruptcy if you’re struggling to pay your debt.

Note: The information provided on CreditRepair.com does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.

The post Understanding personal bankruptcy rates by state appeared first on CreditRepair.com.

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The start of 2022 has been rough for many people. With the pandemic hopefully winding down after more than two years, a new kind of epidemic has impacted the nation: foreclosures. Foreclosure rates are the highest they’ve been since the start of the pandemic, which is causing a lot of concern among homeowners. Let’s look at what precisely the foreclosure rates looked like pre-2022 and where they sit now.

Foreclosure rates pre-2022

Foreclosure rates during the pandemic remained relatively low. In 2018, the national foreclosure rate was 0.47 percent. This rate continued to decrease throughout the COVID pandemic, lowering to 0.36 percent in 2019, 0.16 percent in 2020 and 0.11 percent in 2021.

The pandemic was financially challenging for many people, with millions losing their jobs and savings. So, why did foreclosure rates decrease so much? This is partially due to all the government restrictions launched to help people hold on to their homes throughout the pandemic. However, as the severity of the pandemic died down, many of those government restrictions were lifted.

The Biden administration had put a moratorium on foreclosures, which was extended but eventually ended on July 31, 2021. There was also a moratorium for evictions on foreclosed borrowers, which finished on September 30, 2021. And lastly, the foreclosure restrictions the CFPB placed on mortgage providers ended in December 2021.

As these programs have ended, borrowers are no longer protected, and we’ve seen a natural increase in foreclosures.

What does the foreclosure landscape look like in 2022?

Foreclosures, including default notices, scheduled auctions and bank repossessions, rose 29 percent in January 2022 . In the first month of the year, lenders repossessed or started the repossession process on more than 15,000 homes. And that rising trend shows no sign of slowing down. February 2022 saw a 129 percent increase from February 2021.

However, it’s important to point out that even though these rates are at an all-time high for the pandemic, they’re still low when looking at pre-pandemic levels. The January 2022 foreclosure rate was less than half what it was in January 2020. Numbers may be on the rise, but they aren’t as high as they could be when you look over the last decade.

Foreclosure rates by state

Nationally, the foreclosure rate for January 2022 was one in every 5,922 homes.

You can find the February 2022 foreclosure rates for each state below:

Alabama (24th)

Alabama had 321 foreclosures, for a rate of one in every 7,025 homes.

Alaska (48th)

Alaska had only 10 foreclosures (but keep in mind it’s also the third-least populated state). The exact foreclosure rate was one in every 31,467 households.

Arizona (15th)

Arizona had 516 foreclosures out of 3,003,286 homes in February 2022. This put its foreclosure rate at one out of every 5,820 homes.

Arkansas (35th)

Arkansas saw 136 foreclosures in February 2022. The exact rate was one out of every 10,076 homes.

California (10th)

California had a total of 2,927 homes foreclosed on in February 2022. This translates to a rate of one in every 4,843 households.

Colorado (32nd)

Colorado had 254 out of 2,386,475 homes go into foreclosure, or one in every 9,396 homes.

Connecticut (12th)

Connecticut saw 281 foreclosures in February 2022. This translates to a foreclosure rate of one in every 5,397 households.

Delaware (7th)

Delaware had a total of 133 foreclosures in February 2022, and the exact rate was one out of 3,257 homes.

Florida (9th)

In February 2022, Florida had 2,833 homes go into foreclosure. This translates to a rate of one in every 3,335 households. Florida is the third-most populated state in the country, which partially explains why its foreclosure numbers are so high.

Georgia (14th)

The state saw 762 out of 4,283,477 houses foreclosed on. Georgia’s exact foreclosure rate was one out of every 5,621 homes.

Hawaii (25th)

Despite being the 40th-most populated state, Hawaii only ranks 25th in foreclosure rates in the nation. A total of 75 homes went into foreclosure, for a rate of one in 7,236 households.

Idaho (39th)

In February 2022, Idaho saw 62 households go into foreclosure. That makes the state foreclosure rate one in 11,671 homes.

Illinois (2nd)

Illinois had a total of 2,126 homes out of 5,360,315 homes go into foreclosure. This makes Illinois’ foreclosure rate one out of every 2,521 homes.

Indiana (8th)

Indiana saw a total of 885 homes foreclosed on in February 2022. The exact foreclosure rate for the state is one in every 3,262 households.

Iowa (17th)

Iowa saw 236 out of 1,397,087 households go into foreclosure. The state had a rate of one in every 5,920 homes.

Kansas (43rd)

The 35th-most populated state in the country, Kansas, took the 43rd spot in foreclosure rates in February. In total, Kansas had 78 homes foreclosed on. The exact foreclosure rate was one in every 16,324 households.

Kentucky (42nd)

Kentucky had 134 out of 1,983,949 homes go into foreclosure in February. This puts its foreclosure rate at one in every 14,806 homes.

Louisiana (33rd)

A total of 219 homes were foreclosed on in Louisiana in February, a rate of one in every 9,406 households.

Maine (13th)

While Maine has the ninth-lowest population in the country, it took the 13th spot in foreclosure rates (the same ranking as January). This state had a total of 136 foreclosures in February, and the foreclosure rate was one in every 5,462 homes.

Maryland (6th)

Out of 2,448,422 households, 779 were foreclosed on in just one month. This makes Maryland’s foreclosure rate one in every 3,143 homes.

Massachusetts (27th)

A total of 374 out of 2,897,259 homes were foreclosed on. As a result, Massachusetts’ foreclosure rate stands at one in every 7,747 homes.

Michigan (11th)

In February 2022, Michigan had 857 foreclosures. The state’s foreclosure rate for the month was one out of every 5,363 household units.

Minnesota (37th)

Minnesota closed on 219 out of 2,438,203 homes. In total, its foreclosure rate for the month sat at one in every 11,133 homes.

Mississippi (34th)

Mississippi had 132 homes foreclosed on out of the total 1,322,808 housing units in the state. This translates to a foreclosure rate of one in every 10,021 households in February 2022.

Missouri (22nd)

Missouri saw 411 out of 2,790,397 home units foreclosed in February 2022. In total, Missouri had a rate of one in every 6,789 homes foreclosed.

Montana (44th)

Montana’s population and foreclosure rate aligned; the state has the 44th-largest population. In total, the state saw 26 foreclosures with a rate of one in every 19,622 homes.

Nebraska (19th)

The state saw 132 out of 837,476 houses foreclosed on that month. This translates to a foreclosure rate of one in every 6,345 homes.

Nevada (5th)

A total of 402 foreclosures were filed in February out of 1,250,893 households. Nevada has a foreclosure rate of one out of every 3,112 homes.

New Hampshire (38th)

The state only saw 56 foreclosures in February, at a rate of one in every 11,334 households.

New Jersey (1st)

New Jersey held the top spot for the highest foreclosure rates in the country in January and February 2022, with 1,441 out of 3,616,614 homes going into foreclosure in February. This gives New Jersey a foreclosure rate of one in every 2,510 homes.

New Mexico (21st)

New Mexico maintained the same position in January and February. The state foreclosed on 141 homes in February for a rate of one out of every 6,652 households.

New York (29th)

In February 2022, the state saw 1,015 out of 8,322,722 homes foreclosed on. This translates to a foreclosure rate of one in every 8,200 homes.

North Carolina (18th)

A total of 768 out of 4,627,089 homes went into foreclosure in February 2022. As a result, North Carolina’s foreclosure rate is one out of every 6,025 households.

North Dakota (49th)

The state only had 10 foreclosures in February 2022, for a rate of one in every 37,306 homes.

Ohio (3rd)

Ohio had 1,857 foreclosure filings out of 5,202,304 homes. This gives the state a foreclosure rate of one in every 2,801 households.

Oklahoma (26th)

The state had 234 homes file a foreclosure in February 2022. Oklahoma’s foreclosure rate is one out of every 7,400 households.

Oregon (45th)

In February, Oregon only had 73 foreclosures. This translates to one in every 24,232 homes being foreclosed on.

Pennsylvania (20th)

Pennsylvania saw 876 out of 5,693,314 homes foreclosed on in February 2022. The state had a total foreclosure rate of one in every 6,499 households.

Rhode Island (30th)

Rhode Island came in with the 30th-highest foreclosure rate in the country. The state saw 53 out of 468,335 households foreclose in February. This translates to a foreclosure rate of one in every 8,837 homes.

South Carolina (4th)

The state had 762 foreclosures for a rate of one in every 3,001 homes.

South Dakota (50th)

South Dakota had the fewest foreclosures in the country, with only five homes foreclosed on in February. This put the state in last place. South Dakota’s foreclosure rate was one in every 77,714 households.

Tennessee (40th)

Tennessee saw 249 out of 2,963,486 homes foreclosed on in February. This makes the state’s foreclosure rate one in every 11,902 homes.

Texas (23rd)

Texas had 1,588 foreclosures in just one month, with a foreclosure rate of one in every 6,887 homes.

Utah (16th)

Out of 1,087,112 homes, the state had 184 foreclosures in one month. The overall foreclosure rate was one in every 5,908 houses.

Vermont (46th)

Vermont didn’t have many foreclosures. In total, only 13 homes were foreclosed on in February 2022 and the rate was one in every 25,769 households.

Virginia (31st)

A total of 387 homes had foreclosures in February out of the state’s 3,514,032 households. This translates to a foreclosure rate of one in every 9,080 homes.

Washington (41st)

Despite ranking in the 13th spot for population, the state of Washington had a total of only 244 homes go into foreclosure in February, for a rate of one in every 12,732 homes.

West Virginia (47th)

West Virginia had 33 homes go into foreclosure in February 2022. In total, the state saw a foreclosure rate of one in every 27,036 homes.

Wisconsin (28th)

Wisconsin saw 343 out of 2,694,527 homes foreclose in February 2022. This means the Dairy State’s foreclosure rate was one in every 7,856 households.

Wyoming (36th)

Although Wyoming has the smallest population in the country, it still had 26 foreclosures in one month, for a rate of one in every 10,648 homes.

What to do if you are facing foreclosure

If you’re facing foreclosure, the most important thing you can do is be proactive. There’s a chance it might not be too late and you can still work with your lender to keep your home. Unfortunately, if you’ve waited too long and the foreclosure is unstoppable, you can still take steps to make sure the minimum damage is done to your finances and your credit and even look into removing the foreclosure from your credit report, if possible.

How to work on your credit

Whether you came close to foreclosure or actually had one happen, your credit likely took a significant hit in the process. Poor credit can seep into many areas of your life, preventing you from getting new loans and credit and even potentially impacting your ability to get a job or a lease.

Luckily, credit is something you can rebuild. With the help of the credit advisors at CreditRepair.com, you can take another look at your credit report and search for any incorrect items to remove, as well as learn more about the credit repair process to help you get back on track. The help is right there for you; all you have to do is take advantage of it.

Note: The information provided on CreditRepair.com does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.

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