PHOENIX — The state's high foreclosure rate is also pointing to a big jump in bankruptcies coming on top of a 63% increase in filings last year, according to the National Federation of Credit and Community Professionals citing Arizona as a "bellwether" for U.S. trends.

In a report issued this week out of its Plainfield, N.J. headquarters, the Federation said in "bubble" states like Arizona and Tennessee with high foreclosures per household the impact on small business is significant forecasting "Chapter 13 bankruptcies would be especially robust."

"Foreclosure and bankruptcy data all point to rising risk of spillover effects in distressed bubble states like Arizona and Tennessee," said the Federation adding that "these symptoms represent significant bankruptcy risk for small business whose owners will probably have less capital for funding" operations.