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Rate Of Bankruptcy Filings Is Increasing Dramatically

by MalloryMegan

Pay cuts and layoffs pushed more Americans into bankruptcy the past year, and experts say that the situation won't be likely to get better until the unemployment problem improves. 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 lawyers, it is not only firings and layoffs that are pushing people to file. It's the losses of once-regular over time pay and full time status that have left debtors 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 even though bankruptcy absolve you of the foreboding debt and gives Americans a fresh financial start, consumers often remain unemployed and are not capable of finding 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.

About the Author: Frank Cole

Mallory Megan works for Rapid Recovery Solution and writes articles on medical collection agencies This article, Rate Of Bankruptcy Filings Is Increasing Dramatically is released under a creative commons attribution licence.

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Rate Of Bankruptcy Filings Is Increasing Dramatically