MADISON (WSAU) The number of Wisconsinites resorting to bankruptcy continues to go down, as the economy keeps slowly improving. According to federal court records, just over 25,000 state residents filed for bankruptcy last year. That’s down seven-percent from the nearly 27,000 who sought protections in 2011.
Attorneys agree that falling unemployment is the biggest reason for the drop in bankruptcies, but there’s another side to that. Milwaukee attorney James Miller says people who’ve been out of work for months are filing for bankruptcy so the wages from their new jobs don’t get garnished to pay old bills. Also, Milwaukee lawyer David Leibowitz said many people are getting lower-level jobs than they had previously – and they cannot afford the same standard of living they had in the past, when many carried lots of debt.
About three-fourths of all Wisconsin bankruptcies are the Chapter-Seven kind that wipes out things like medical bills and credit card debt.