Bankruptcies Increase While Employment Rates Plummet
Terminations and pay cuts pushed more people into bankruptcy last year, and experts are saying that the situation won’t improve until the unemployment issue is resolved. 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 debt, 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 annihilates the looming debt and offers consumers a fresh financial start, people often remain unemployed and are unable to find employment to get an adequate 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 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 McGuinness-Hickey is employed by a debt collection company. She also composes articles on consumer spending, business, finance, and debt collection.
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Bankruptcy doesn’t keep you from getting a car / housing . You just need to pay cash for it going forward, which would be a GREAT thing. I’m not an advocate of bankruptcy if you can avoid it, but the fact that it keeps you from acquiring debt for many years is in the end a good thing for a persons finances
We are in pretty bad shape right now as a country. I can’t see how we can keep going down this road with the government bailing everyone out. It just seems like we are trying to dodge the inevitable. I can understand the government trying to influence the direction of the economy. It needs some stewardship but I think the government is throwing way too much of our tax money out there. Its scary how much money the government has thrown at the ailing economy.
It does seem like sometimes they are just trying to keep the economy afloat and will are putting just enough cash in it to keep it going. They keep expecting the public to pick up the slack but it’s those same people that are struggling and not able to keep it going.