Bankruptcy rate by state


Personal bankruptcy filings declined in the United States in 2021, with the national average per capita rate falling to 1.29 from 1.71 in 2020. Yet, significant differences exist between states. Here’s a look at the most recent numbers and why they’re dropping.

Key points to remember

  • Individual bankruptcy rates fell after the Great Recession from 2007 to 2009, stabilized between 2016 and 2019, then fell again after the arrival of the coronavirus pandemic.
  • In 2020, for example, bankruptcy rates fell by 30%. They fell again in 2021.
  • Even though bankruptcy rates have fallen in all states for 2021, large differences remain between states.

How the pandemic wreaked havoc on bankruptcy rates

In the aftermath of the Great Recession of 2007-2009, US bankruptcy rates steadily declined. From 2016 to 2019, they stabilized at just under 2.5 filings per 1,000 U.S. residents, only to start falling further with the onset of the COVID-19 pandemic.

In 2020, the combined Chapter 7 and 13 bankruptcy rate fell to 1.71 per 1,000 people, from 2.44 the previous year, according to the American Bankruptcy Institute. The 30% drop was largely attributed to the easing of financial pressure on many households by federal stimulus measures, such as increased government benefits and moratoriums on evictions and some foreclosures.

In 2021, the trend continued.

There are big differences between the states

As in the country as a whole, bankruptcy rates fell in 2021 in all states, as well as in the District of Columbia, Guam, Puerto Rico and the Virgin Islands.

Of course, the United States is not cut from one cloth, and notable differences can be seen in bankruptcy rates between different states. At the highest level, Alabama recorded 3.13 bankruptcy filings per 1,000 people in 2021, while Alaska recorded a tenth, at 0.31 filings per 1,000 people.

Source: American Institute of Bankruptcy, November 2021

The Top 10 individual bankruptcies

Alabama has consistently held this top spot since 2017. The 10 highest states for individual bankruptcies in 2021 were:

  1. Alabama, with 3.13 bankruptcy filings per capita
  2. Nevada, with 2.57
  3. Tennessee, with 2.40
  4. Indiana, with 2.17
  5. Georgia, with 2.12
  6. Mississippi, with 2.03
  7. Kentucky, with 2.00
  8. Utah, with 1.97
  9. Delaware, with 1.83
  10. Arkansas, with 1.82

At the bottom of the scale, in addition to Alaska, was Vermont, with 0.44 bankruptcy filings per capita; Maine, with 0.48; and the District of Columbia, with 0.50. In general, states with the lowest bankruptcy rates tend to have some of the smallest overall populations.

Source: American Institute of Bankruptcy, November 2021

The essential

As the map above (using 2020 data) illustrates, many of the states with the highest per capita bankruptcy rates are in the South, including Alabama, Tennessee, Mississippi, Georgia, and Arkansas. Two others in the Top 10 connect the South to the Midwest: Kentucky and Indiana. Nevada and Utah in the West saw their rates rise relative to other states.


The American Bankruptcy Institute has been tracking and reporting Chapter 7 and 13 bankruptcy filing rates since 2012, releasing a monthly data report each month. While more detailed data on filings and outcomes can be obtained from the US court system, this more robust dataset is only released quarterly and lags slightly behind the ABI’s monthly reports.