MILWAUKEE -- Falling home prices, increasing credit card debt and wages that aren’t keeping pace with inflation are some factors behind a sharp rise in bankruptcy filings.

More Than 106,000 People Filed For Bankruptcy In October 2008

In October alone, 106,000 people filed bankruptcy across the country. It’s a 40 percent increase from 2007.

Despite people do whatever they can to avoid bankruptcy, thousands of people in Wisconsin are on their way to bankruptcy.

“I owe the IRS for back taxes,” said Roxann Sanabria. “We’ve got a $218 cable bill and a $300 energy bill.”

“I have an outstanding student loan with the state of North Carolina for almost $6,000,” she said.

“At this point my debt is outrageous…I would say anywhere from $40,000 to $50,000,” she said.

Sanabria’s debt began years ago, after a divorce and a period of unemployment. Today, she has a full-time job, however, she said she can’t seem to get ahead.

“Cable, you know, if you miss a month because your kid gets sick, or your tire blows out and you got to go get tires and you can't afford to pay your cable bill for a couple months,” she said.

Because her past is impacting her future, Sanabria decided to file for bankruptcy. Her move is the same as many people in Wisconsin. Bankruptcy filings in the eastern part of the state are up nearly 40 percent from last year.

There's been a misconception over the years that people run up their credit cards and go through bankruptcy. For one thing, that's fraud, you can't do that. But, at least in this part of the country it's not that common for people to intentionally live beyond their means,” said Judge Margaret McGarity.

McGarity said divorce and a failed business are common reasons people go bankrupt.

Jeff Bloomdahl said losing his job and a medical issue in the family led him to file bankruptcy earlier this year.

“Looking back at it, we were like a lot of people. We took equity out even before I lost my jobs, on the house… and we did our mortgage to either pay off debt or do improvements on the house,” he said.

While bankruptcy can wipe out debt, it can stay on credit reports for up to a decade.

Debt Counselor Kathryn Crumpton said it can impact everything from interest rates to insurance premiums.

“It's public record. So it may even be a problem in getting some jobs. An employer may ask 'have you ever filed a bankruptcy?' and then you have to disclose that to the potential employer,” she said.

Despite the effects of filing for bankruptcy, Sanabrias plans to go through with it once she can afford to file. Between attorney’s fees, court costs and mandatory credit counseling, she expects to shell out a small fortune.

“By the time you know it , your bankruptcy is costing you. If you have to take time off from work, it could easily cost $3,000 to file a bankruptcy,” she said.

However, the expense isn’t the same for everyone because every case is different.

Every bankruptcy chapter costs a different amount, and attorney’s fees vary. Channel 12 news found that the cost to file bankruptcy can range from hundreds of dollars to thousands of dollars.