Wisconsin Bankruptcy Law

As we put 2009 in the rear-view mirror, final numbers show that bankruptcies filed in Wisconsin (both the Eastern District and Western District U.S. bankruptcy courts) totaled
27,413–a 30 percent increase over 2008. The vast majority (80 percent) were Chapter 7 petitions. Wisconsin bankruptcy filings jumped by an astounding 65 percent since 2007. And going forward, as the Milwaukee Journal Sentinel points out, underemployment in addition to unemployment looms large: “Bankruptcy lawyers noted it’s not only layoffs and firings driving people to insolvency as the economic downturn drags on. The losses of once-regular overtime pay and full-time status have left consumers unable to stay current on monthly payments that in the past were no problem to handle.” Lost or limited income would also suggest that Wisconsin bank foreclosures will continue to multiply as more jobless homeowners have difficulties keeping up with monthly payments.

Hopefully, Wisconsin residents who are currently out of work or underemployed will find greater success in their job hunt in 2010. But any consumer behind the economic eight ball may find that this could a good time to speak with a debt consolidation lawyer about various options, including an individual bankruptcy in Wisconsin. A Chapter 7 or Chapter 13 bankruptcy in Milwaukee may not be in the immediate future, if at all, but getting answers to your Wisconsin bankruptcy questions may be a valuable starting point for your prospects of obtaining debt relief in Wisconsin.

A piece in the Washington Times notes that when Congress overhauled the bankruptcy code in 2005 (revisions that changed the bankruptcy laws in Wisconsin and everywhere else), it intended to steer more consumers towards a Chapter 13 bankruptcy repayment plan. However, things didn’t pan out as anticipated because the explosion of long-term unemployment forced more consumers without regular income into Chapter 7 as their only alternative. “Overburdened by huge mortgages, plunging home values, unsustainable credit card debts, tightening credit conditions and soaring joblessness, families have been carrying an ‘overhang of consumer debt’ for a decade or so as a result of a low savings rates and over consumption,” the Times article explains. This resulted in a “debt bubble” and soaring bankruptcy filings, according to the Times. The decrease in home values has particularly created a Catch-22 for many consumers who are now unable to even qualify for a home equity loan as a temporary bill-paying measure, assuming for the sake of discussion that would be a wise thing to do: “The ability to tap into home equity to bridge difficult times is no longer available,’ [an official with the American Bankruptcy Institute] said, because home prices have plunged since the housing bubble began to deflate in 2006.”

There’s an old saying, you can’t borrow your way to prosperity. And the collapse in real estate values, plus job layoffs and maxed-out credit cards, affects honest consumers from all brackets: working class, middle class, and upper income. Unfortunately, many consumers in this state may now have little choice but to consider an individual bankruptcy in Wisconsin. If you’re facing the double whammy of the debt and housing bubbles that might be about to burst, contact a debt consolidation attorney about debt relief in Wisconsin. A trusted legal adviser is where to go for Wisconsin bankruptcy information.

What’s next for our troubled economy? Hard to say, but everyone hopes a rally is right around the corner. Unfortunately, the latest bankruptcy numbers indicate that the economy is not yet ready to be taken off life support. For example, national consumer bankruptcy filings increased by 9 percent in October. And so far this year, about one million consumers have gone bankrupt–some 135,000 in October alone. These statistics were the highest since the first three quarters of 2005, when 1.35 million consumers declared bankruptcy. About 1/3 of the October filings came in the form of Chapter 13 bankruptcies, an option that allows consumers to repay a portion of their debts over an extended period of time.

Unlike the situation today, in 2005 bankruptcies apparently went through the roof  because of sweeping changes in the bankruptcy laws which caused debtors to rush to file under Chapter 7 before new, more strict rules went into effect. Today, for many consumers considering personal bankruptcy in Milwaukee and elsewhere in the state, bankruptcy is less about choice and more about necessity.

When all is said and done, over 1.4 million consumers overwhelmed by joblessness, mortgage loans, credit card bills and other challenges are expected to seek debt relief in federal bankruptcy court by the end of 2009. When the final results get tallied, a staggering 30% increase is expected over 2008.

Obviously Wisconsin is not immune from the national economic picture. Wisconsin consumers are having a tough go. But bankruptcy isn’t just about cold statistics–it’s about real people struggling to care for their families in difficult financial circumstances. If you are seeking debt relief in Wisconsin, you will need a lawyer that knows his way around the bankruptcy court and the ins and outs of bankruptcy laws in Wisconsin. A qualified debt consolidation lawyer can answer your Wisconsin bankruptcy questions and discuss the various alternatives to help you move on with your life.

Married couples sometimes don’t agree about the decision to file bankruptcy.  While one spouse may be interested in filing a Chapter 7, the other would like to stay clear of it.  The decision to file is a difficult one and can be really devisive in these types of situations.  There are options, however, that do allow married couples to file without their spouses.
 
It is not mandatory for married couples to file together.  In most cases, it makes more sense for a married couple to file together as it is the same price to file as a couple as it is to file as an individual, and it ensures that all debts are included in the case.  It is possible to file without one’s spouse, however.  The term used in bankruptcies for this is non-filing spouse.
 
As a bankruptcy attorney, I don’t always recommend filing with a non-filing spouse.  However, if it allows you to compromise with your spouse about how to proceed, it may be best to set up a consultation with a bankruptcy lawyer to go over your options.
 
As a bankruptcy attorney, I don’t always recommend filing with a non-filing spouse.  However, if it allows you to compromise with your spouse about how to proceed, it may be best to set up a consultation.