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Bleak News As Bankruptcy Increases While Employment Rate Plummets

Todays Date: November 17, 2018

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.

According to bankruptcy lawyers, not only is it layoffs and firings 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 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 takes away the looming debt and offers consumers a fresh financial start, consumers often remain unemployed and are unable to find employment to get an acceptable income again.

Even more depressing, unless the economy improves enough for industries to start hiring again, there is not much reason to think that bankruptcies will go down in 2010. Researchers 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 might seem like a good option to get a fresh start, but it affects your credit report negatively for ten years, rendering you not able to get a car, place of residence, or employment. Before declaring bankruptcy, it is a smart 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 company. Also, she composes stories on consumer spending, business, finance, and debt collection.

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