The economy is always a hot topic in an election year, but it seems like this has been particularly true in Wisconsin ever since the beginning of the Great Recession back in 2008. There has been a lot of debate about whether our state’s economy is improving or worsening, and which statistics people use to justify their argument often depends on whether their party is in or out of office. If you are looking for more objective information about how our economy is doing, one source you can rely on to be spin-free is the courts.
The Administrative Office of the U.S. Courts has just released its data on the number of bankruptcies filed over the past year, and it appears that Wisconsinites are in a bit better shape this year than last.
During the 12-month period ending June 30, 2016 (which is the end of the fiscal year), there were 17,671 bankruptcies filed in Wisconsin. This includes 414 business-related bankruptcies, and 17,257 non-business bankruptcies. Non-business bankruptcies include personal bankruptcies and most farming-related bankruptcies.
This is an improvement from the previous 12 months, when 19,913 bankruptcies were filed in Wisconsin.
The 11.3% drop in the number of filings suggests Wisconsin residents and businesses are doing better than those across the country as a whole. Across the United States, bankruptcies fell by only 6.9% for the year, and this is the second straight quarter where the rate of decline was less than 10% after consecutive double-digit declines had occurred in every reporting period since December 2011.
The fact that Wisconsin still has double digit declines is a good sign since our state, and the Milwaukee area in particular, was hard hit by the recession. Milwaukee County still leads the state in the number of bankruptcies filed. Of the 17,671 bankruptcies filed in Wisconsin last year, 7,040 were filed in Milwaukee County alone, far outstripping the number filed in any other one county.
Even controlling for population density, Milwaukee County is worrisome. The region as a whole, looks a bit better. Counties in the region saw the following number of bankruptcies filed:
Racine – 734
Ozaukee – 150
Waukesha – 923
Sheboygan – 244
That means as a region, the Milwaukee area had 9,091 or 51.4% of the state’s 17,671 bankruptcies.
As we attempt to draw conclusions about what this data means, it is important to keep in mind that bankruptcy as a concept is a mixed bag.
Having a large number of people file for bankruptcy is not good since it means people and businesses are struggling in the grand scheme of things. But on a more micro level, filing for bankruptcy is like hitting the do-over button. Wiping away old debts and putting people and businesses on a stronger financial foundation so that they can have a second chance to create a good life for their family or start a new business is a good thing.