For every bankrupt person in the room, there's a detailed account of financial hardship in some lawyer's briefcase. Welcome to the Bankruptcy Capital of America. Before the new year, one member of every 23 Memphis households will have gone bankrupt, as Fortune magazine pointed out to the nation in its August 4th issue. In Memphis last year, more bankruptcies were brought into the world than babies. Everyone has an opinion about why Memphis became bankruptcy's poster child.
Credit is easy, collection laws are tough, and the Tunica casinos are close, just to name a few.
But some suggest that Memphis' bankruptcy problem is more deeply rooted in the city's culture. Former U.S. Representative and Memphian Walter Chandler is credited with getting Congress to establish the Chapter 13 program in 1938. Since then, there's been no shortage of well-known local bankrupts, from Jerry Lee Lewis to county commissioner Michael Hooks, who just filed Chapter 13 for the second time this year. Family and friends of bankrupts see that going belly-up doesn't necessarily mean losing possessions or buying power. Some lenders enable people with bad credit to purchase homes, cars, and other expensive items at exorbitant interest rates even when they have prior histories of bankruptcy.