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Nevada Ranks No. 1 in Bankruptcy Filings, Delinquency Rates

By Faye Mergel
Published: Saturday, December 5th, 2009

Two reports during Thanksgiving week show how Nevada ’s economy was seriously impaired by the recession. The economy left a very serious mark on the credit report of its consumers, which could affect their financial lives for up to ten years.

Nevada Ranks No. 1 in Bankruptcy Filings, Delinquency RatesAccording to the Administrative Office of the US courts, Nevada has the highest rate of bankruptcy filings during the fiscal year that ended last September 30. The state’s bankruptcy filings went up to 1.4 million, a 34.5 percent increase from its preceding fiscal year.

Nevada leads the whole United States when it comes to the number of bankruptcies with 10.49 filings per 1,000 persons. The national rate for bankruptcy is at 4.52 filings for every population of 1,000.
Last fiscal year, Nevada was number two in the country for most number of bankruptcies, with a filing rate of 6.39 every 1,000 persons. During the same period, America ’s bankruptcy filings were at 3.38 for every population of 1,000.

During the 2009 fiscal year for Nevada , bankruptcy filings totaled to 27,560—a 64.5 percent jump from 2008.
Unemployment is the major factor expert cite why many Nevadans are carrying bankruptcies on their credit report. As of last month, the state’s unemployment rate is at 13 percent, which is an increase of 7.7 percent. Analysts explained that recession reduced travels to Las Vegas , consequently leading to the drastic decline in Nevada ’s construction and development sector.

Of the 27,560 total bankruptcy filings, 881 were filed by business owners while the rest are personal filings. Majority of personal filings are Chapter 7 liquidations at 19,225.

Meanwhile, credit report issuer TransUnion notes that Nevada leads the nation when it comes to credit card delinquencies during the third quarter. The rate is at 1.98 percent, a significant difference from the national rate of 1.1 percent. That is the ratio of people 90 days or more behind their credit card payment.

TransUnion predicts that the number of Nevadans behind their credit card payment is expected to go down by the end of 2009, but the state is still expected to lead US card delinquency rate at 1.9 percent. A delinquency could remain on a credit report for seven years and could adversely affect the interest rate of a person whenever he applies for credit.

Finance analyst Ezra Becker advises consumers to be more careful with the way they handle their plastic since it is their primary purchasing vehicle during tough economic times. He also notes that most consumers are more aware of that fact, since national debt went down last quarter.

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