Whenever in the course of my work day I’m not meeting with Indiana bankruptcy clients, representing them in court, or lecturing to attorney or civic groups about bankruptcy, you’ll probably find me reading.  In order to offer the most up-to-date legal advice to my clients, I consider it crucial to stay on top of the latest developments in my field. Then, as one of a very few Consumer Bankruptcy Specialists (see Bankruptcy Lawyer Certification: Not Just Paper On The Wall) I am required to take at least sixty hours of continuing education courses every three years.

In practice, I find valuable information and insights come from many different sources. I read professional journals on financial planning, estate planning, and employee benefits, because this information sometimes relates to different client situations. I read newspapers and newsletters to stay on top of any news which can affect my Indiana bankruptcy clients, news about job opportunities or layoffs, or news about changes in legislation that can affect bankruptcy clients. Friends, neighbors, and colleagues often clip articles that they think will be of interest to me and perhaps to my blog readers. Of course, I gain much information online.

The other day in my online browsing, I came across a fascinating article on BCS Alliance.com. The article was about researchers who are trying to find out why some states (our state of Indiana included) have bankruptcy filing rates that are double the national average, while other states have much lower bankruptcy rates.  Some of the factors the researchers compared (in order to learn if there was a direct correlation with bankruptcy statistics) were unemployment rates, income levels, medical debt levels, gambling, and state bankruptcy laws.  I’ve explained in several earlier blogs that there are federal bankruptcy laws, but that each state has some leeway in how they handle bankruptcy; I helped write the exemption portion of current Indiana state bankruptcy law.

The study itself was done in 2004, and it examined bankruptcy rates from 2000 – 2004.  For that period of time, Indiana was second only to Missouri in bankruptcy filing rates.  The results of the study were not as expected, not at all.  Missouri, highest in number of bankruptcies, had lower unemployment than states with much lower filing rates. It also did not prove true that states with higher average incomes had lower bankruptcy rates.  Gambling wasn’t a clear culprit, either; Utah was fourth highest in bankruptcy filings, but has almost no gambling. There did seem to be a slight correlation between state bankruptcy laws and the number of bankruptcy cases actually filed. The connection appeared to relate to how much property a debtor is allowed to keep in bankruptcy and how much garnishment of wages creditors were allowed to do.  Still, none of the data provided a clear connection between any one of these factors and bankruptcy filing rates.

Interest in bankruptcy has obviously increased in recent years due to the economic downturn. Still, none of the research was able to prove exactly which factors most influence bankruptcy rates in any one state.

During the almost twenty-five years I’ve served Indiana bankruptcy clients, both federal and Indiana bankruptcy law have continued to evolve, job markets have continued to change, the economy has gone through changes, but several things have remained constant for me.  As I wrote in one of my very earliest bankruptcy blogs back in the summer of 2007 (see “Ten Is Not The Number”), what I see out there with clients who have taken the big step of talking with an attorney and getting started on a plan of action, is the most incredible sense of relief combined with resolve.  “For these guys”, I remarked, “the word ‘hope’ comes way before the word ‘kaput’!”