You may be surprised to learn that in 2015, Tennessee actually had more bankruptcy filings than any other state. In fact, the number of filings in Tennessee was double the national average according to the Memphis Daily News.
There are a few different reasons that may possibly explain what sets Tennessee apart when it comes to residents filing for bankruptcy. While many other states have taken action to limit payday loans, Tennessee has no such restrictions. You can walk into a payday lender and come away with a loan that has an interest percentage rate in the hundreds and there are no laws on the books to limit this practice. If you are already experiencing financial stress and look to a payday loan for relief, you may end up in even worse shape with no choice but to file for bankruptcy.
This is particularly true if you are part of the millennial generation. Many young people have learned the lessons associated with burying themselves in credit card debt. However, this means they are more likely to turn to alternative funding in the form of payday loans and flex loans and are therefore more likely to head toward bankruptcy.
Finally, regulations in Tennessee make it relatively easy for lenders to seize your property. Certain kinds of mortgages allow lenders to foreclose on your home without having to go to court. Filing for bankruptcy then becomes one of the only ways to halt that process. Property seizure also includes garnishing your wages. Losing that kind of direct income that you depend on to pay your bills can directly contribute to having to file for bankruptcy.