More than one out of every 100 Nevadans filed for bankruptcy in 2010, placing Nevada in the top spot for the largest number of bankruptcy filings last year. Texas, on the other hand, rounded out the bottom three states in terms of annual bankruptcy filings in 2010. Texas had approximately 2.5 filings per 1,000 residents.
One of the main reasons for the high number of Nevada residents filing for bankruptcy is because the state was one of the hardest hit states during the “Great Recession.” The bankruptcy data further highlighted the employment and financial struggles facing many Nevada residents as the state’s rate of bankruptcy filings was twice the national average.
While the lagging real estate market has continued to create financial problems for many in Nevada, other factors have contributed to the high number of bankruptcy filings.
The laws in Nevada, as well as the other top three states of Georgia, Tennessee and Alabama, tend to be pro-creditor. Pro-creditor laws mean that it is more likely that an individual will be unable to negotiate a modified loan with their lender and, instead, will need to seek bankruptcy protection. Bankruptcy lawyers in the hardest hit states have also made it easier to file for bankruptcy by making it cheaper and quicker to file.
Despite leading the nation in the number of bankruptcy filings, Nevada actually saw an overall decrease in the number of bankruptcy filings 2010. However, last year was the second consecutive year Nevada placed first in the nation for the number of bankruptcies.
Source: Wall Street Journal (WSJ Online) “One of Every 100 Nevadans Filed for Bankruptcy Last Year“