BANKRUPTCY LESSON FROM MEMPHIS?
A University of Michigan study found the bankruptcy rate in Memphis, Tenn.,
is almost four times the national average.
* This year, a member of one household in every 23 in Memphis will declare
bankruptcy.
* Nationwide, personal bankruptcies since 1994 have risen 44 percent, to
1.1 million annually --while filings in the Memphis metropolitan area, which
had a good-sized head start, rose 32 percent.
* The average Memphis resident owes $10,137 in non-mortgage debt -- 18 percent
more than the typical American.
Experts report that while most financially strapped Americans liquidate
their possessions and wipe out their debts using Chapter 7 of the bankruptcy
code, Memphians prefer to keep their property and make regular payments
over five years under the terms of Chapter 13.
What are the reasons for Memphis's dubious distinction?
* One is Tennessee's debt collection law, which makes it easy for creditors
to garnish borrowers' paychecks.
* Studies show that people are often pushed to bankruptcy through job-loss,
illness or divorce -- and the divorce rate in Memphis is about 10 percent
above the national average.
* Some analysts note that Memphis has a culture of bankruptcy -- the city,
itself, having gone that road in 1879.
Source: Kim Clark, "Why So Many Americans are Going Bankrupt,"
Fortune, August 4, 1997.
Quoted and condensed from National Center
for Policy Analysis
Policy Digest, Monday, July 28, 1997 -- "Making Ideas Change
the World" -- ncpa@onramp.net
Return to Divorce Reform Page
Return to Favorite quotes on divorce reform
Return to Americans for Divorce Reform