Layoffs and pay cuts pushed more people into bankruptcy last year, and analysts say that the situation will most likely not improve until the unemployment issue improves. In Wisconsin, bankruptcy filings raised to 30 percent in 2009. This came on top of a 35 percent increase in the preceding year.

Bankruptcy lawyers say that not only is it layoffs and firings that are motivation to file. It's the losses of once-regular over time pay and full time status that have left consumers unable to keep up with monthly payments that were not an issue to pay.

U.S. Bankruptcy Court records reveal that there were 27,413 bankruptcy petitions filed in Wisconsin last year. More than 80% were Chapter 7 cases. Chapter 7 cases wipe out medical bills, credit card balances, and other types of debt. Recent Research by The Associated Press shows us that more than 1.4 million bankruptcies were filed in 2009, an sharp increase of about 32% from 2008.

And even though bankruptcy absolved the impending debt and offers consumers a fresh financial start, people often stay unemployed and are unable to find employment to get a decent income agency.

Even more depressing, unless the economy improves enough for industries to start hiring again, there is not much reason to think that bankruptcies will go down in 2010. Researchers have noted that home foreclosures will continue to pile up in 2010 because people who previously had adequate credit have lost employment and cannot keep up with payments.

Bankruptcy could seem like a good option to get a fresh start, but it has a negative effect on your credit report for ten years, leaving you unable to get a car, place of residence, or employment. Before declaring bankruptcy, it might be a wise decision to speak with your creditors and see if some sort of repayment plan can be worked out.

Mallory Megan is employed by a debt collection company. Also she writes articles on business and finance, consumer spending and collection agencies. Visit the Uber Article Directory to get a totally unique version of this article for reprint.