Author: Gerri Elder
Bankruptcy rates and credit card delinquencies are high across the country as businesses and individuals reel from the effects of the recession, but some states are feeling the pinch worse than others.
Two recent reports found that the state of Nevada has experienced the highest rate of bankruptcy filings per capita, as well as the highest rate of delinquent credit card payments.
According to the Las Vegas Sun has the story of a Administrative Office of the U.S. Courts report showing that bankruptcy filings are up 34.5 percent across the country for the year ending on Sept. 30. That works out to, on average, 4.52 bankruptcy filings for every 1,000.
Leading the nation is Nevada, where there are 10.25 bankruptcy filings per 1,000 people. That is an increase of about 300 percent compared to last year when the bankruptcy filing rate was only 3.38 cases per 1,000.There were 27,560 bankruptcy filings in Nevada in 2009. This represents an increase of 64.5 percent increase from 2008.
The bankruptcy rate has been fueled by increasing unemployment. In 2008, the unemployment rate in Nevada was 7.7 percent. In 2009, it shot up to more than 13 percent as the recession hit Nevada's tourism economy hard. The growth of hotels and gaming projects slowed, taking a toll on the construction and development industries.
Of the bankruptcy filings in Nevada, 26,679 of them were personal filings and 881 were business filings. More than19,000 of those bankruptcies were Chapter 7 bankruptcy filings.
Another report, from the credit report company TransUnion.com, found that Nevada also leads the way in credit card delinquency. The Las Vegas Sun reports that, according to the report, Nevada’s credit card delinquency rate is 1.98 percent. The Sun describes that percent as “the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards.” The national delinquency rates is 1.1 percent in the third quarter, down from 1.17 percent in the second quarter.
There may be a small silver lining in this dark cloud. Though the state of Nevada does lead the nation, the current rate represents an improvement from the previous two quarters. In the second quarter, the rate in Nevada was 2.19 percent. In the first quarter that rate was 2.44 percent.
TransUnion.com projects that the rate will continue to drop, resulting in a 1.9 percent rate by the end of the year. In that same time, TransUnion.com projects the national rate to remain the same.
According to TransUnion, this drop represents “the first time in 10 years, third quarter national delinquency rates showed a decrease from the previous quarter.” The drop may indicate a change of the usual yearly debt patterns, showing that people could be reacting to the realities of the recession by spending their savings, rather than carrying a large amount of debt.
New credit card laws coming into effect soon will play an undetermined role in spending and credit card debt in the future. For now, the falling rate of credit card delinquency is a promising trend in Nevada.