What Does Bankruptcy Surge Across U.S. Mean for Recovery Chances?
Tuesday, November 30, 2010
As a measure of economic pain, bankruptcies carry a special power. A bankruptcy is more than losing one's job or home, it is essentially calling for a complete financial do-over.
Since 2007, the number of bankruptcies in the United States has nearly doubled. But that single national number is misleading, look closer and you'll see that some places have taken a much harder hit than others.
County figures from the Administrative Office of the U.S. Courts show the nation's wealthiest counties (see the map), the places we call the Monied Burbs, have seen some of the sharpest rises in bankruptcy filings in that period — a 92 percent bump. And following close behind them are the wealthy more exurban Boom Town counties, which saw an 80 percent increase.
(Actually leading the way are the Mormon Outpost counties with a staggering 138 percent increase, for reasons that are open to some debate.)
The Burbs and the Boom Towns share a few common traits. They are both wealthier than the average county and better educated. And while it's never polite to play the blame game — to declare, "it's your fault" when you are suffering through, say, the worst economic downturn in the past half-century — those statistics raise questions about debt and credit in the nation's wealthier enclaves.
And three years into the current economic morass, the bankruptcy data offer clues into the larger economic forces behind it and suggest the way back may be long and difficult.
Few Have Been Immune
To be sure, the Burbs and Boom Towns aren't alone in their bankruptcy problems. Every one of the 12 county types Patchwork Nation examines has seen a jump. But some places saw their bankruptcy numbers increase by much less.
The less-wealthy Minority Central counties, with high numbers of African-Americans saw an increase of 30 percent. The Evangelical Epicenters, which also have lower incomes and high concentrations of born-again Christians, saw an increase of about 50 percent. Those numbers are nothing to write home about but compared the suffering in other places, those communities have done better.
In New York state the breakdown looks a little different. There were big jumps in the Monied Burbs around New York City – Rockland, Westchester, Putnam, Orange and Nassau counties. But the bigger problems are upstate in the Service Worker Centers like Washington and Warren counties in the east and Oswego and Niagra on Lake Ontario.