Bleak News As Bankruptcy Increases While Employment Rate Plummets
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 attest that it is not only is it layoffs and firings that are reasons 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 a problem to pay.
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.
Worse still, unless the economy improves enough for companies to begin hiring, there is not much reason to feel that bankruptcies will go down in 2010. Analysts 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 may seem like a good option to get a fresh start, but it negatively affects your credit report for ten years, rendering you unable to get a car, place of residence, or employment. Before declaring bankruptcy, it is a wise decision to speak with your creditors and see if some sort of repayment plan can be worked out.
Mallory Megan works for a debt collection agency. She also composes articles on consumer spending, business and finance, and debt collection. You are welcome to reprint this article - but get your own unique content version here.
Mallory Megan on January 28th 2010 in Real Estate
