This week, the Milwaukee Journal Sentinel reported that bankruptcy filings in the state fell by 8 percent in 2014, likely thanks to the improving economy.
There were 20,774 bankruptcy petitions filed with the U.S. Bankruptcy Court in Wisconsin last year — which was down from 22,630 in 2013 — and it was the fourth year in a row bankruptcies in the state have been on the decline.
Bankruptcy filings peaked in 2010, during the Great Recession, when close to 30,000 petitions were filed, but the state’s highest year ever for insolvencies came in 2005 when 38,000 file for bankruptcy.
Bankruptcy attorneys told the Journal Sentinel that most people who filed for Chapter 7 bankruptcy, the most popular type of personal bankruptcy, did so because of debt relating to a catastrophic health event, job loss or divorce.
Our own James Miller, who was interviewed for the piece, added that the firm has also noticed an increase in Wisconsin residents who are forced to declare bankruptcy because of overwhelming debt owed to payday lenders and auto title lenders.
As we have described in past posts, payday loans and auto title loans can get people into serious trouble quickly because of the triple-digit percentage interest rates that often apply.
While the optimistic reason for the decline in bankruptcy filings is that the economy has improved and fewer Americans are facing serious debt problems, there is also a less-optimistic possibility that was addressed in the Journal Sentinel article.
Because people can only file for Chapter 7 bankruptcy once every eight years, it is possible that there are still many Americans struggling with debt problems but these individuals don’t have the option for file for bankruptcy because they already did so within the past eight years.
It is recommended that anyone facing overwhelming debt — whether you have filed for bankruptcy in the past or not — should speak with an experienced bankruptcy lawyer for advice.
