Following on from our 2015 Minnesota Bankruptcy Statistics article, we thought we’d compare Minnesota to the states with the lowest and highest number of bankruptcies filed in 2015.
- How does Minnesota compare to the highest and lowest per capita bankruptcy filings?
- How does Minnesota compare to the state with the lowest ratio of Chapter 7 bankruptcies?
- How does Minnesota compare to the states with the highest ratio of Chapter 7 bankruptcies?
- How does Minnesota Compares To Bankruptcies in the Lowest and Highest States By Population?
Here are the states with the lowest and highest numbers of bankruptcy in 2015.
Alaska – lowest
Perhaps surprisingly Alaska had the fewest bankruptcies, whilst maybe less surprisingly California had the most bankruptcies in 2015.In 2015 Alaska saw:
- 441 bankruptcies filed
- 84% Chapter 7 (354)
- 16% Chapter 13 (69)
- 23% decrease on 2014
- 63 filings per capita
- 698,473 people in Alaska (2009 census data)
Minnesota
In 2015 Minnesota saw:
- 10,500 bankruptcies filed
- 85% Chapter 7 (8,868)
- 15% Chapter 13 (1,577)
- 13% decrease on 2014
- 99 filings per capita (1000s) using 2009 census data
- 5,266,214 people in Minnesota (2009 census data)
California – highest
In 2015 California saw:
- 80,391 bankruptcies filed
- 74% Chapter 7 (59,230)
- 26% Chapter 13 (20,442
- 11% decrease on 2014
- 17 filings per capita
- 36,961,664 people in California (2009 census data)
Number of bankruptcies
- Over 99% fewer bankruptcies filed in Alaska (441) compared to California (80,391)
- Over 95% fewer bankruptcies filed in Alaska (441) compared to Minnesota (10,500)
- Over 86% fewer bankruptcies filed in Minnesota (10,500) compared to California (80,391)
Comment
California has a much higher rate of bankruptcy than either Alaska or Minnesota
Per capita
- Over 70% fewer filings per capita in Alaska (0.63) compared to California (2.17)
- Over 68% fewer filings per capita in Alaska (0.63) compared to Minnesota (1.99)
- Over 8% fewer filings per capita in Minnesota (1.99) compared to California (2.17)
Comment
Minnesota and California have a similar filing per capita rate, much higher than that of Alaska
Population
- Over 98% fewer people living in Alaska (698,473) compared to California (36,961,664)
- Over 86% fewer people living in Alaska (698,473) compared to Minnesota (5,266,214)
- Over 85% fewer people living in Minnesota (5,266,214) compared to California (36,961,664)
Comment
Minnesota would see a comparable number of bankruptcies filed as California if the population was similar to that of California.
Income
According to https://en.wikipedia.org/wiki/List_of_U.S._states_by_income:
Median household income by state:
- Alaska – $69,825
- California – $67,458
- Minnesota – $61,824
Comment
As the incomes are almost the same in Alaska and California, why do so few people file for bankruptcy in Alaska compared to California?
Cost of living
Alaska v California
Using a cost of living calculator http://money.cnn.com/calculator/pf/cost-of-living/ shows that someone earning $70,000 in Anchorage Alaska needs over $73,000 to maintain the same standard of living in Los Angeles.
in Los Angeles compared to Anchorage:
- Groceries cost 14% less
- Healthcare costs 22% less
However in California,
- Housing costs 29% more
- Transportation costs 10% more
- Utilities cost 10% more
Comment
Whilst groceries and healthcare cost less in Los Angeles, housing, transport and utilities cost significantly more. This may explain why more people file for bankruptcy in California.
Minnesota v Alaska
Someone earning $60,000 in Minneapolis, Minnesota needs over $73,000 to maintain the same standard of living in Anchorage, Alaska.
In Alaska:
- Groceries cost 16% more
- Housing costs 46% more
- Utilities cost 12% more
- Transportation costs 7% more
- Healthcare costs 34% more
Comment
Everything costs more in Alaska compared to Minnesota, which maybe isn’t surprising, but as the cost of is so high, why are there so few bankruptcies?
Minnesota v California
Someone earning $60,000 in Minneapolis, Minnesota needs over $77,000 to maintain the same standard of living in Los Angeles, California.
In California:
- Groceries cost the same,
- Housing costs 87% more
- Utilities cost 23% more
- Transportation costs 18% more
- Healthcare costs 5% more
Comment
The amount needed to maintain the same standard of living is almost 30% higher in Los Angeles, perhaps explaining why there so many bankruptcies in California.
With housing almost twice as expensive in California as in Minnesota, it’s no wonder so many have financial worries.
Conclusion
Knowing more about the cost of living, such as housing, groceries, transportation utilities and healthcare in other states can show why some states are more likely to see higher rates of bankruptcy than others.
