The Tennessean recently reported that bankruptcy filings in Middle Tennessee rose as much as twenty percent in 2009. Hit especially hard were those in the home building and trucking industries. What is more concerning is that industry experts and bankruptcy attorneys believe that that number will continue to rise throughout 2010. Playing a role in the steady increase was credit card debt, unemployment, real estate foreclosures, and medical debt. Homebuilders often found it difficult to manage their businesses when their subcontractors were not paid. If they were unable to collect, then it was likely that the main homebuilding business would have to file for bankruptcy.

The twenty percent increase includes both business and individual filings in Middle Tennessee. In addition to this increase, there was also a rise in the number of individuals filing for Chapter 11 bankruptcy. Specifically, there was a fifty-seven percent increase in these filings in Tennessee, due primarily to wealthy individuals filing for bankruptcy in accordance with business debt reorganization laws. Although the bankruptcy laws were changed in 2005 to make it more difficult for consumers to enter into bankruptcy, the poor economy, record unemployment figures, and the housing market bust have contributed to increased filings.

In fact, business bankruptcies across the United States rose to a record thirty-eight percent since the new bankruptcy laws went into effect. In Middle Tennessee alone, there was a fifteen percent increase in business filings under Chapter 7. According to the Associated Press, 2009 was the seventh worst year for bankruptcy filings at 1.4 million. Although the states with the largest increase in petitions were in the West, including California, Tennessee until only recently had the highest per capita rate of bankruptcy filings. Nevada surpasses Tennessee just this past month; however, the state still remains number two in this area.

Although the bankruptcy process is difficult on consumers, it has also been hard on many of the creditors. Mortgage companies, credit card companies, vendors, contractors, and subcontractors are all fighting to collect money owed to them in a bankruptcy. Most of the time, they lose. And, although there are reports that the economy shows some signs of improvement and that unemployment will begin to taper off here one year after the stimulus plan went into effect, most experts agree that bankruptcy petitions will continue to increase in at least the first half of 2010. Those states with inflated filings (such as Tennessee) already are sure to see those increases almost double.