One sign that much of the economy in Wisconsin, including the Milwaukee area, is finally recovering from the real estate, financial, and banking crisis of 2008 is the fact that the first half of this year marks the lowest level of bankruptcy filings in 7 years. The Eastern District of U.S. Bankruptcy Court for Wisconsin, which encompasses much of the east side of the state, reported 7,740 bankruptcy filings.
The financial and real estate meltdown caused the Great Recession and cost thousands their jobs and millions of dollars of real estate value. The job losses, combined with reductions in hours in many businesses often led to missed mortgage payments and the threat foreclosure. Thousands of Wisconsin residents were left in foreclosure when they missed mortgage payments.
This, in turn, left many individuals turning to bankruptcy for protection from their creditors and to stop foreclosures on their property. A bankruptcy could allow them to restructure their debts and sometimes save their home.
When it could not save the home, it could prevent them from being burdened with a deficiency balance, as many foreclosed homes were “underwater,” with borrowers owing more on their mortgage than the value of the home.
While bankruptcy filings have fallen in Wisconsin, the fact that 5,800 people still filed a Chapter 7 bankruptcy, and about 900 filed a Chapter 13, indicates that many people are still struggling with varying amounts of overwhelming debt that necessitates a bankruptcy filing.
As with many situations, bankruptcy is personal. No matter how well the general economy may be performing, situations like divorce, an illness, injury or job loss can be catastrophic to your finances, and can leave you with few options besides a bankruptcy filing.
Source: jsonline.com, “Bankruptcy filings hit 7-year low in eastern Wisconsin,” Paul Gores, July 11, 2015