Wisconsin Bankruptcy Law

Many of my Wisconsin bankruptcy clients want to know if the process will have a negative impact on their credit scores. Bankruptcy will not really hurt your credit if your credit rating is already not that great when you file.  A better way to view it is that bankruptcy provides you with the opportunity to start rebuilding your credit.  You can regain a better credit score even within a two year period of time!

If your credit rating is decent before you file for bankruptcy, then filing will likely affect your score, but there are two main things to keep in mind in that situation.  The first is that if you are really struggling and have a great credit score, it is likely that you will not be able maintain that rating on your own anyway if you cannot continue to stay current with your bills.  It will only be a matter of time before that score starts going down as the monthly payments you make get harder and harder to manage.  The second thing you should remember is that you can rebuild your credit within two years.  Bankruptcy does not ruin your credit, and we know ways for you to rebuild in the future.

Good news for Wisconsin consumers with a sweet tooth: As a follow up to a previous blog entry, the bankrupt Milwaukee-area candy company Quality Candy looks like it found a buyer and apparently will stay in business. Family owned Quality Candy, which has been in operation for about 100 years, filed for Chapter 11 bankruptcy in January. It was an unusual bankruptcy filing in that the company reported debts of $3.4 million but assets of about 4.4 million. A group of local investors have submitted a $2.2 million offer to buy the company, which needs the go-ahead of the bankruptcy judge. Quality Candy is also seeking court approval to get out of various leases at area malls.  Under the bankruptcy laws in Wisconsin and other states, bankrupt companies for walk away from such leases if the bankruptcy judge approves. In this instance, it would allow the successor company to negotiate better lease terms with the shopping centers.

As we have discussed previously, a business entity can not file for a Chapter 13 bankruptcy in Milwaukee, but Chapter 13 is an option for an individual who is  personally on the hook for business debts. If you operate a business that may be drowning in red ink, it may be time to turn to a Wisconsin bankruptcy lawyer for assistance. A Chapter 13 bankruptcy in Milwaukee may be the best way to cut your losses and move forward.

Many people avoid the personal bankruptcy filing process until after they receive a tax refund check for fear that they might lose the refund. A Chapter 7 bankruptcy filing does not affect your tax refund eligibility.  The Bankruptcy Court does not intercept those funds.  With the Chapter 13 bankruptcy, however, there is a possibility that you will need to provide half of whatever refund you receive to the Trustee as a part of your plan.  Not all cases require this, however.  If you are interested in filing a Chapter 13 and are concerned about your refund, we can certainly determine what your plan would entail during our free consultation.

A home is the largest investment that most Wisconsin residents ever make. When the possibility of personal bankruptcy becomes a consideration, their house becomes top of mind and they want to know if it is at risk. The short answer is, “Maybe.” Filing a Chapter 7 bankruptcy does not mean that you have to surrender your home.  There are two types of debt that bankruptcy attorneys look at, secured and unsecured.  Secured debts are the types of loans that have some form of real property tied to them.  Homes and cars are the best examples of these types of debts.  Lenders have more security with these loans because they have the right to take legal action to get the cars or the houses back and resell them if their borrowers default.  Credit card debts, hospital bills, or utility bills are examples of unsecured debts.  These types of debts have no real property tied to them, and therefore there is not any sort of collateral for the creditor to collect if a borrower defaults.  Secured debts are not dis-chargeable if you want to keep the real property, whereas the majority of unsecured debts are completely dis-chargeable in a Chapter 7.  What this means is that as long as you stay current with your house payments and continue to make your monthly payments when you are supposed to, it is entirely possible to keep your home and file a Chapter 7 to clear out your unsecured debt.

With intense competition from Netflix and others, bricks and mortar video rental stores have really fallen on hard times. Movie Gallery, Inc., the parent company of Hollywood Video filed for bankruptcy protection several months ago and closed several of its Milwaukee-area stores. After defaulting on one of its loans, the company notified the court on May 7 that it will shut down all of its approximately 1,900 remaining locations nationwide, including stores in Cudahy, Racine, and Kenosha.  The chain has lost significant market share to the movies-by-mail or via online streaming offered by Netflix or local Redbox rental kiosks. Blockbuster Video has encountered similar issues, and may also wind up in bankruptcy. Blockbuster has already closed a number of its shops around the country.

As these corporations (as well as local small businesses) are finding out, consumer preferences can be fickle.  If you own a troubled business in Wisconsin that may not be able to stay afloat in this difficult economic environment, a bankruptcy attorney in Milwaukee can help. A skilled Wisconsin bankruptcy lawyer can assess you assets and liabilities and develop a solution, which can include a Milwaukee small business bankruptcy, geared to your particular needs. While the bankruptcy law, for example, does not permit you to go Chapter 13 as a business entity, the petition can include business-related debts for which you signed a personal guarantee. So an individual bankruptcy in Wisconsin does provide some means for dealing with heavy debts that an individual might have piled up in a business.