In these economically challenging times, the number of bankruptcy filings has skyrocketed, to no surprise. Take Wisconsin for example. In 2009, the figure rose by 30% compared to the previous year, which itself had risen 35% compared to the year before that. Nationally, the picture is just as gloomy. More than 1.4 million bankruptcies were filed last year, representing an increase of 32% from the year before. This situation is set to continue so long as the unemployment rate remains the way it is.
In Wisconsin, there were 27,413 bankruptcy petitions filed last year. This figure was higher by 21,144 compared to that in 2008. Despite the enforcement of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) that was meant to push more people toward Chapter 13 filings, more than 80% were Chapter 7 cases instead, the kind that eliminates unsecured debts such as credit card balances, medical bills and other types of consumer liabilities.
The rising incidents of bankruptcies are exacerbated by the continued lack of jobs. Bankruptcies can wipe out debts but in order to move forward, one must have a continual source of income. But with the sluggish economy, employers are tightening their belts and are slow in hiring. Thus a bankrupt may not be able to obtain gainful employment, thus rooting him to square one. Thus the vicious cycle is prolonged. Unless the employment rates improve, the number of bankruptcies is set to continue to rise.
Another sector that is severely affected is housing. Apart from the subprime mortgage crisis, house owners are finding it difficult to keep up with their mortgage payments due to the loss of their jobs. An increasing number of people have resorted to working more than one job but still earn less than they did working one job 5 years ago. This is especially so for commission-based workers and small business owners. Thus home foreclosure rates are on the rise.
Financial analysts predict that 2010 will be a really tough year for many Americans.
In the Eastern District of Wisconsin last year, the number of Chapter 11 bankruptcy filings showed a significant rise to 76 compared to only 21 in 2008. On the other hand, in Western Wisconsin District, the number of Chapter 11 filings reduced marginally to 40 in 2009 compared to 44 the year before.
Unfortunately, even those who were well off in good economic times are seeking bankruptcy protection. Bankruptcy attorneys have the unenviable task of dealing with depressed clients offering little hope that things will turn for the better in the near future.
In Wisconsin, there were 27,413 bankruptcy petitions filed last year. This figure was higher by 21,144 compared to that in 2008. Despite the enforcement of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) that was meant to push more people toward Chapter 13 filings, more than 80% were Chapter 7 cases instead, the kind that eliminates unsecured debts such as credit card balances, medical bills and other types of consumer liabilities.
The rising incidents of bankruptcies are exacerbated by the continued lack of jobs. Bankruptcies can wipe out debts but in order to move forward, one must have a continual source of income. But with the sluggish economy, employers are tightening their belts and are slow in hiring. Thus a bankrupt may not be able to obtain gainful employment, thus rooting him to square one. Thus the vicious cycle is prolonged. Unless the employment rates improve, the number of bankruptcies is set to continue to rise.
Another sector that is severely affected is housing. Apart from the subprime mortgage crisis, house owners are finding it difficult to keep up with their mortgage payments due to the loss of their jobs. An increasing number of people have resorted to working more than one job but still earn less than they did working one job 5 years ago. This is especially so for commission-based workers and small business owners. Thus home foreclosure rates are on the rise.
Financial analysts predict that 2010 will be a really tough year for many Americans.
In the Eastern District of Wisconsin last year, the number of Chapter 11 bankruptcy filings showed a significant rise to 76 compared to only 21 in 2008. On the other hand, in Western Wisconsin District, the number of Chapter 11 filings reduced marginally to 40 in 2009 compared to 44 the year before.
Unfortunately, even those who were well off in good economic times are seeking bankruptcy protection. Bankruptcy attorneys have the unenviable task of dealing with depressed clients offering little hope that things will turn for the better in the near future.