Texas, the Largest State with Lowest Per Capita Bankruptcies

English: Seal of Texas

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United States Per Capita Bankruptcy Statistics

According to the National Research Center November 2011 bankruptcy filing report, Texas place on a list of six bankruptcy jurisdictions having filings that are the lowest per capita in the nation is “noteworthy.” Texas, with 2,570 bankruptcy filings per million adults is less than half the national average. Other notable entries include Washington D.C., Alaska, South Carolina, Vermont, and North Dakota.

On the other end of the spectrum, Nevada leads the nation per capita bankruptcies with 11,250 bankruptcy filings per one million adults. Georgia, Tennessee, Utah, and California follow close behind Nevada in per capita bankruptcies.

Per capita bankruptcies in general have been falling since 2010 with November 2011 slightly increasing with a holiday adjustment. “Nationwide, 2011 filings to date amount to about 5400 filings per million adults, or one in every 200.”

Texas Current Economy

Recent shed light on the Texas current economy shows that the recession has hit Texas as hard as most other states. Texas currently is reporting a $25 billion deficit in its budget for the next two years. Unemployment in Texas is lower than the national average, but it is not much better than New York which also enjoys per capita bankruptcies lower than the national average.

With the population of Texas increasing at a rapid rate due mostly because of its liberal land-use and zoning policies keeping housing cheap, Texas employment is still not keeping pace with the increase in population.

Texas overall has a lower cost of living than many of the harder hit states by the recession, but add into the mix Texas conservative policies on refusing to raise taxes, and you may want to think twice before moving to the Lone Star State. Texas ranks near the bottom in the nation for education spending per pupil, and it leads the nation with people without health insurance.

All of these facts may explain why Texas has lower per capita bankruptcies filed than most of the other states. The cost of living is much less, housing costs are much less, education is cheaper, and healthcare in some ways cheaper. With oil and gas produced in the state, the cost of energy is also cheaper.

Everything in Texas seems to be cheaper, but at what expense? Who and how will the budget deficit ever be paid? When the realization finally hits that Texas is not immune to the recessions of the national economy, will per capita bankruptcies eventually rise?

Texas liberal Bankruptcy Exemption Laws

If per capita bankruptcies do begin to rise in Texas when the budget deficit hits the fan, Texas enjoys one of the most liberal bankruptcy exemption laws of any state in the the union. Some people have often referred to Texas as a “Debtor’s State” because of those liberal bankruptcy laws.

Some of the Texas exemptions include: no limit on your homestead with property of 10 acres in town and up to 200 acres outside of town; up to $60,000 in personal property for a family; a variety of other exemptions; and garnishments are not allowed except by federal statutes.

Texas may be a leader with per capita bankruptcies being as low as they are in the state and with the cost of living being so low, but if you ever have to file for bankruptcy in Texas, it will still be wise to have a bankruptcy attorney to represent you.

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