Rate Of Bankruptcy Filings Is Increasing Drastically

Layoffs and pay cuts pushed more people into bankruptcy last year

, and analysts allege that the situation will not be likely to improve until the unemployment problem gets better. In Wisconsin, bankruptcy filings raised to 30 percent in 2009. This came on top of a 35 percent increase in the preceding year.

According to bankruptcy experts, it isn't only layoffs and firings that are Americans people to claim bankruptcy. It is the losses of once-regular over time pay and full time status that have left consumers unable to keep up with monthly payments that in the past were not an issue to pay.

U.S. Bankruptcy Court records show us that there were 27,413 bankruptcy petitions filed in Wisconsin in 2008. More than 80% were Chapter 7 cases. Chapter 7 cases resolve medical bills, credit card balances, and other types of debt. Recent Research by The Associated Press says that more than 1.4 million bankruptcies were filed in 2009, an increase of about 32% from 2008.

And although bankruptcy takes care of the looming debt and gives debtors a fresh financial start, consumers often remain unemployed and are not able to find any new type of employment to get an acceptable income again.

Even more depressing, unless the economy improves enough for businesses to start hiring again, there isn't much reason to believe that bankruptcies will decrease in 2010. Experts have noted that home foreclosures will continue to pile up in 2010 because people who used to have acceptable credit have lost employment and cannot keep up with payments.

Bankruptcy might appear to be a good choice to obtain a fresh start, but it has a negative effect on your credit report for ten years, leaving you unable to get a car, place of residence, or employment. Before declaring bankruptcy, it might be a wise decision to speak with your creditors and see if some sort of repayment plan can be worked out.

by: Mallory Megan

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