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Monday, July 6, 2009

AP: Bankruptcy rate higher where wages are seized

Georgia's personal bankruptcy rate is roughly four times higher than neighboring South Carolina's.

Are Georgians really four-times as unable to pay their debts as South Carolinians?

Nope. It turns out laws allowing creditors to garnish the wages of debtors have much higher rates bankruptcy than states that protect wages from creditors.

So spoketh the AP:

[T]he five states that prohibit or strongly limit wage seizures — North Carolina, Pennsylvania, South Carolina, Florida and Texas — all have drastically lower rates than their neighbors, with particularly striking differences along borders, where economic conditions are similar but bankruptcy rates are not.

South Carolina's bankruptcy rate is almost one-quarter that of Georgia's; Pennsylvania has half the rate of Ohio; North Carolina has about one-third the rate of Tennessee; Texas has a smaller rate than all its neighbors; and Florida has just about half the rates of Georgia and Alabama.

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