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Bankruptcy in Memphis is more common than many people realize

On Behalf of | Jul 9, 2024 | Consumer bankruptcy |

One of the reasons that some people are judgmental about bankruptcy is that they view it as relatively rare. They think that only irresponsible people file for bankruptcy.

The reality is that many people who need bankruptcy protection are relatively diligent and responsible people. A single medical emergency or unexpected job loss could be enough to leave people with insurmountable personal debt. Bankruptcy is often the last line of protection between individuals and extreme financial hardship. Contrary to the judgmental attitude some people have, the need to file personal bankruptcy is somewhat common, especially in the broader Memphis area.

Memphis sees more bankruptcies than any other urban area

According to a recent review of bankruptcy filings, people living in the Memphis area are more likely than those in any other urban area to file for bankruptcy. Shelby County has more bankruptcy filings than any other urban county when adjusted for population.

According to data from 2023, there were six bankruptcy filings per 1,000 residents. Most counties had only one filing per 1,000 residents. When looking at the 100 largest counties in the country, others with high rates did not exceed four filings per 1,000 residents. The vast majority of those filing for bankruptcy in Shelby County pursue Chapter 13 bankruptcies.

Given how many people in Memphis may have filed for bankruptcy previously and may struggle financially, local social stigma may not be as extreme as people expect. Coworkers and employers may very well have known someone who filed for bankruptcy previously. That may mean that people treat those in need of bankruptcy relief with more grace.

Particularly if someone intends to file for Chapter 13 bankruptcy like the vast majority of other filers in the Memphis area, they may need help with the process. From establishing an appropriate repayment plan to recognizing when going back to court to modify that plan is necessary, there are many issues that are easier to handle with the right assistance.

Letting go of judgment and stigma related to personal bankruptcy can be an important first step toward improved financial circumstances. People who learn about how common bankruptcy actually is may worry less about the need to seek out immediate financial relief.