Every State Sees Double-Digit Bankruptcy Growth

Bankruptcies rose fastest in Arizona, hitting a year-over-year rate of 77%, followed by Wyoming at 60%, Nevada at 59% and California at 58%. For some law firms, bankruptcy cases are taking over the business, as the spike in business opportunities has caused them to turn from other areas, such as divorce and civil litigation. And, the situation isn't likely to slow down any time soon. A year and a half ago, it was the adjustable-rate mortgage wave. Now, it's people who have lost their jobs and can't handle the bills they face.

The bankruptcy reform laws enacted in 2005 are largely seen as responsible for having kept filings contained, and the fact that 2009 was so active following these reforms suggests that it has been a tougher year than the six that posted higher bankruptcy filing rates. In 2005, more than 2 million people filed for bankruptcy, as they raced against the vote in Washington, and it fell to 600,000 the next year. This backdrop makes the severity of 2009 more tangible.

Every state posted an increase in bankruptcies in 2009, and even the states that pulled through with the least damage still showed double-digit growth. Alaska and Nebraska fared best with bankruptcy upticks of 12%. North Dakota wasn't far behind at 14%.