Wisconsin Bankruptcy Law

In a previous blog posting, we discussed the means test and the median family income as they relate to an individual bankruptcy in Wisconsin. The median family income as determined by the federal government varies from state to state and also depends on the size of your family.

The means test in part determines whether a debtor can file a Chapter 7 bankruptcy in Milwaukee (or elsewhere). Or, in the alternative, a Chapter 13 repayment plan. In other words, the means test is a line in the sand a between eligibility for a Chapter 7 liquidation or Chapter 13. In short, it can have huge financial ramifications about what, if anything, you need to pay back in a consumer bankruptcy in Milwaukee.

Before a debtor passes or fails the means test, various items that can be deducted from your income under the bankruptcy laws in Wisconsin. Although each situation has unique aspects, necessary expenses can include taxes, union dues, health and disability insurance, child care expenses, energy costs in excess of the national average, and job-related education, among others. To establish these expenses to the satisfaction of the bankruptcy court, you’ll need organized, valid records for at least six months prior to the bankruptcy filing.

Determining all the applicable exemptions and expenses in a bankruptcy case is a job for a trained professional. Millions of Americans file bankruptcy every year for one reason or another. Lawmakers created the bankruptcy code to help protect honest, hard-working people from suffering through their financial disasters. At the same time, the laws can be very tricky and technical, so it is essential to obtain guidance and input from an experienced Wisconsin bankruptcy lawyer. Do not go it alone.

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.

To much hoopla including television commercials in heavy rotation,  the post-bankruptcy GM announced (as we’ve reported here previously) that it had repaid $6.7 in taxpayer-funded bailout loans ahead of schedule. But, as it turns out, is there both more and less here than meets the eye? U.S. Senator Charles Grassley called it an elaborate Trouble Asset Relief Program (TARP)  “money shuffle.” And the TARP federal inspector general confirmed that the money was paid back not from earnings from selling cars but from another pool of TARP bailout money the automaker already received from the government. According to Grassley, “the taxpayers are still on the hook, and whether TARP funds are ultimately recovered depends entirely on the government’s ability to sell GM stock in the future. Treasury has merely exchanged a legal right to repayment for an uncertain hope of sharing in the future growth of GM.  A debt-for-equity swap is not a repayment.”

More information will likely emerge on the exact nature of GM’s arrangement in the coming days and weeks. For ordinary consumers seeking debt relief in Wisconsin, however, there are no smoke and mirrors. A Chapter 7 bankruptcy in Milwaukee or elsewhere is typically a straight liquidation. A Chapter 13 in Milwaukee requires a repayment plan over an extended period of time without any creative bookkeeping.  And if the debtor is in business, the debtor can continue to operate that business during the course of the Chapter 13 case.  In these challenging economic times, you may find yourself considering either a personal bankruptcy in Milwaukee or a Milwaukee small business bankruptcy. A qualified, professional Wisconsin bankruptcy lawyer can promptly determine your circumstances and then explain the individualized options available for your particular financial needs.

The Milwaukee Business Journal reports that an increasing number of southeastern Wisconsin real estate developers have been forced into a personal bankruptcy in Milwaukee because of Wisconsin bank foreclosures in the commercial sector. The story explains that “Developers typically provide personal guarantees on their commercial mortgages, which means banks eventually pursue the developers personally for a judgment.” In general, a developer that has signed off on a now-defaulted, huge personal note for a commercial property can seek Chapter 7 protection if the lender decides to take the matter to court.

But as we have alluded to previously, Chapter 7 isn’t just for real estate moguls or entrepreneurs that have been undermined by fading property values. For most ordinary, hardworking Wisconsin consumers facing serious financial difficulties, a Chapter 7 bankruptcy in Milwaukee often allows homeowners to remain in their primary residence while the case works its way through court. Exemptions that among other things protect the residence were created in order to provide debtors with the basic essentials needed to help them achieve a fresh start. And during that time, any foreclosure attempts by the lender come to a grinding halt. Perhaps you’ve been downsized out of your job and can no longer afford your high monthly mortgage payments. Protection under the bankruptcy laws of Wisconsin may be an option for obtaining needed debt relief in Wisconsin. A step in the right direction might be to obtain guidance from a debt consolidation lawyer at the initial appearance of financial distress.

Bankruptcy isn’t for everyone, but it could be one of the viable alternatives for those who have fallen on very hard times. In a previous post, we outlined five reasons why those desiring debt relief in Wisconsin would pursue a consumer bankruptcy in Milwaukee or in a surrounding community. But there are also understandable factors that might make a hardworking person hesitant seeking bankruptcy protection. These include..

    * Not wanting to let anyone down. Under the best of circumstances, the honorable approach is to keep faith with all your creditors and pay your bills in full. However, it may be in the best interests of your and your family to obtain a fresh start before your debt load and financial challenges become even more unmanageable.
    * Keeping things private. While most court documents are public, unless you are some kind of celebrity, it is very unlikely that an individual bankruptcy in Wisconsin will generate any undue publicity. Creditors on your outstanding bills and anyone accessing your credit report will have notice of the bankruptcy, however.
    * Being thrown out in the street. Many debtors fear being stripped of all their property, but even in Chapter 7 liquidation in most instances allows the consumer to keep his/her home, car, and other necessities.
    * Changes in the law. We have previously discussed various nuances of the 2005 bankruptcy amendments this blog; despite more red tape in the bankruptcy laws in Wisconsin, there is no significant obstacles in the way of individuals qualifying for either a Chapter 7 or Chapter 13 bankruptcy in Milwaukee.
    * Legal costs. While legal expenses (what the attorney charges to handle your case along with bankruptcy court filing fees) must usually paid up front, a reputable and experienced Wisconsin bankruptcy lawyer will present you with a reasonable fee schedule that won’t cost you and arm and a leg.

If massive debt has taken control of your life, perhaps for reasons beyond your control, it may be time to review your options and obtain answers to your Wisconsin bankruptcy questions and concerns with a qualified debt consolidation lawyer.