Layoffs and pay cuts pushed more people into bankruptcy last year, and analysts say that the situation will most likely not improve until the unemployment issue improves. In Wisconsin, bankruptcy filings raised to 30 percent in 2009. This came on top of a 35 percent increase in the preceding year.
Bankruptcy Lawyers are saying that not only is it firings and layoffs that are motivation to file. It's 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.
U.S. Bankruptcy Court records show that there were 27,413 bankruptcy petitions filed in Wisconsin in the past year. More than 80% were Chapter 7 cases. Chapter 7 cases annihilate medical bills, credit card balances, and other types of debt. Recent Research by The Associated Press showed that more than 1.4 million bankruptcies were filed in 2009, an increase of about 32% from 2008.
And although bankruptcy wipes out the looming debt and offers consumers a fresh financial start, people often remain unemployed and are not able to find employment to get a decent income again.
Even worse, unless the economy improves enough for businesses to start hiring, there is not much reason to believe that bankruptcies will go down in 2010. Experts have noted that home foreclosures will continue to pile up in 2010 because people who previously had adequate credit have lost employment and cannot keep up with payments.
Bankruptcy could seem like a good option to get 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.
Bankruptcy Lawyers are saying that not only is it firings and layoffs that are motivation to file. It's 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.
U.S. Bankruptcy Court records show that there were 27,413 bankruptcy petitions filed in Wisconsin in the past year. More than 80% were Chapter 7 cases. Chapter 7 cases annihilate medical bills, credit card balances, and other types of debt. Recent Research by The Associated Press showed that more than 1.4 million bankruptcies were filed in 2009, an increase of about 32% from 2008.
And although bankruptcy wipes out the looming debt and offers consumers a fresh financial start, people often remain unemployed and are not able to find employment to get a decent income again.
Even worse, unless the economy improves enough for businesses to start hiring, there is not much reason to believe that bankruptcies will go down in 2010. Experts have noted that home foreclosures will continue to pile up in 2010 because people who previously had adequate credit have lost employment and cannot keep up with payments.
Bankruptcy could seem like a good option to get 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.
About the Author:
Mallory Megan works for a debt collection company. She also writes stories on the credit industry, business and finance, and debt collection.
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