Wisconsin bankruptcy filings rise more than 20%
By Paul Gores of the Journal Sentinel
Lingering unemployment continued to take a toll on consumers and small businesses in the first quarter of the year, as bankruptcy filings in Wisconsin rose more than 20%.
There were 6,135 petitions for bankruptcy from January through March, compared with 5,104 in the first quarter of 2009, court records show.
Most of the filings were Chapter 7 bankruptcies – the type that wipe out credit card balances, medical bills and other types of consumer debt.
“It still has to do with people out of work trying to hang on. They can only hang on so long,” said Madison bankruptcy attorney Claire Ann Resop.
In Wisconsin last year, more than 27,400 bankruptcy petitions were filed in federal court, which was up almost 30% from the previous year.
Lawyers who handle bankruptcy cases said even though more analysts say the economy is turning around, it’s not happening fast enough to prevent people who’ve been fighting to stay afloat from declaring insolvency. Among those coming to see bankruptcy attorneys are laid-off workers or entrepreneurs who tried to survive by using credit cards to cover costs, hoping the economic downturn wouldn’t continue as long as it has.
“If a person accepts what the economists are saying about improvements in the economy, I think it needs to be recognized that it took us a long time to get where we were and it’s going to take a long time to get out,” said Bruce Lanser, of Lanser Law Office in Waukesha.
James Miller, of Miller & Miller in Milwaukee, said many small-business owners whose businesses have failed are declaring personal bankruptcy.
Miller said a couple he recently spoke with were using credit cards to pay their mortgage as they looked for new jobs, but they now have been out of work for a year. “They just said it’s to the point where they can’t do it anymore,” Miller said.
Resop, of the firm von Briesen & Roper, said that as a trustee for the Western District of Wisconsin U.S. Bankruptcy Court, she is seeing more people who at one time had income above the state’s median. They have been able to hold on longer than many debtors, she said.
“They had a little more reserved. They usually had people they could go to borrow money. They usually had a little equity and they could take a second mortgage. They could cash in some retirement accounts. But now, they’re gone,” Resop said.
Resop said she finds it difficult to see any significant improvements in the economy.
“I know a lot of good people looking for jobs who used to make good money,” she said. “They can’t find a job, and it’s not for lack of effort and not for lack of skill or expertise. So until each one of us doesn’t have a bunch of friends who can’t find jobs, I don’t get the whole ‘economy is much better’ thing.”