The Natural State may be one of the most financially strapped. According to The American Bankruptcy Institute, Arkansas has some of the most bankruptcy filings in America. The institute took multiple factors into account when conducting their research, including things like a state’s divorce rate, job market, wage growth and impact of natural disasters.
Several of Arkansas’ neighbors also have high numbers of bankruptcy filings, including Alabama, Tennessee, Mississippi and Kentucky. That is because these states often have unfavorable wage garnishment laws, which can make it easier for creditors to seize assets from debtors.
How the state stacks up
Arkansas’ median household is relatively low at just slightly more than $45,000 a year. On top of that, Arkansas also has the highest divorce rate in the nation. That means when some spouses part ways, learning to live on one income may be a significant adjustment.
While the state’s unemployment rate is only at 3.6%, it still has some of the lowest median hourly wages in the nation at just $14.48 per hour. According to the Census Bureau’s American Community Survey, Arkansas gets a D- rating when it comes to consumer-friendliness. That’s because state laws tend to lean in favor of debt collectors.
What causes people to file for bankruptcy?
As life can take unexpected twists and turns, not everyone is prepared for sudden financial ruin. People across Arkansas and the rest of the country may file for bankruptcy due to:
- Job loss
- Medical debt
- Student loans
- Credit card debt
- Divorce
- Foreclosure
- Worker pay cuts
Consumers deserve to start over
If your debt is so overwhelming that you’re falling behind on your bills and collectors keep calling you, filing for bankruptcy could be a viable option for you. If this is the case, working with a knowledgeable and trusted legal partner could help get you the relief you need.