Statistics relating to bankruptcy filings can be of interest for a variety of reasons. For one thing, they can serve as a barometer of economic health, at least to an extent. Bankruptcy statistics can also tell you a bit about the type of people who file for bankruptcy, the reasons they file, and the type of relief they are seeking.
According to Wisconsin state court records, the number of bankruptcy filings in 2015 was down 11 percent from 2014 and the lowest it has been in eight years. Reasons cited for the improvement include decreasing unemployment and stricter credit requirements. As we pointed out in a recent article on this topic, though, stricter credit standards have corresponded to an increase in predatory lending, which can present serious credit problems for those who are victimized.
Like much of the rest of the country, the number of bankruptcy filings in Wisconsin naturally rose after 2007, peaking at nearly 30,000 in 2010, after which time there has been a regular decrease in filings. Divorce, job loss and medical crisis are commonly cited reasons for bankruptcy filings.
One interesting point to note is that the majority of bankruptcy filings in the years of the recession were Chapter 7 filings. As some readers may be aware, Chapter 7 bankruptcy contrasts with Chapter 13 bankruptcy in that the aim of the former is to provide the debtor relief by liquidating nonexempt assets and using the proceeds to pay off creditors.
For an individual debtor, determining the appropriate form of personal bankruptcy to file for isn’t always a decision that can be made easily. Both Chapter 13 bankruptcy and Chapter 7 bankruptcy have different requirements, goals, and outcomes. Making the right decision is important in order to ensure optimal debt relief. In our next post, we’ll look at some of the considerations that should come into play when making a decision about the form of personal bankruptcy for which a debtor should file.