Wisconsin Bankruptcy Filings at an All-Time Low

Recently, news outlets reported that bankruptcy filings in Wisconsin have reached an all-time low. This is exciting and encouraging news, as it means that more and more families are finding their way to more stable financial footing. What is behind this decrease in filings and what steps can you take to ensure that you do not need to file for bankruptcy?

What’s Behind the Decrease?

During the peak of the great recession in early 2010, nearly 16,000 Wisconsin consumers and businesses filed for bankruptcy. During the first six months of 2018, roughly 8,800 individuals and consumers filed bankruptcy petitions. This is nearly 45 percent decrease from the peak in 2010.

A number of different factors appear to be contributing to the decreasing Wisconsin bankruptcy filing rates. First, Wisconsin’s unemployment rate is around 2.9 percent, meaning that households are not only seeing more income than they have in recent years but they are also seeing steady income. This is allowing more and more individuals to pay off their existing debts and responsibly assume new debts.

Second, it appears that lenders have gotten much better at helping borrows modify their mortgages when necessary, rather than forcing them into bankruptcy. Many lenders did not have such provisions in place during the great recession and were overwhelmed by the magnitude of mortgage troubles across the nation.

All of this is welcome news for Wisconsin families, but it does not mean that Wisconsin is out of the woods entirely when it comes to needing to file for bankruptcy. Read on to learn about some proactive steps you can take to shore up your finances and recognize the warning signs that you may be at risk of bankruptcy.

Reducing Your Risk of Bankruptcy

It has been said that an ounce of prevention is worth a pound of cure, and that is particularly true when it comes to bankruptcy. Being able to recognize when you are at risk of bankruptcy is one the most important steps when it comes to ensuring you have long-term financial footing. Take some time to sit down with your finances and assess your debts and savings; do you have enough money to carry you through six months of unemployment? If not, now is a good time to start cutting back on spending and increasing your savings.

Additionally, take some time to assess your career and your personal circumstances. Individuals who have been in the same career for a long time are particularly likely to need to file for bankruptcy when their industry takes a hit. The same is true for people who are heading towards divorce or who expect to face significant medical bills in the future. It isn’t fun, but focusing on building your savings now can pay off in a big way down the road.

Need to File for Bankruptcy?

At Hanson & Payne, LLC, we know that no one expects to file for bankruptcy. While the economy is doing better and job market is more stable, we are all just one unexpected life change away from facing financial uncertainty. If that happens to you, our experienced bankruptcy attorneys are ready to help get you through this rough patch in your life. If you need to file for bankruptcy, contact us today.

Should You File for Chapter 7 or Chapter 13 Bankruptcy?

Nobody expects to file for bankruptcy, but when life hands you unexpected and uncontrollable circumstances filing for bankruptcy can be a good way to protect yourself from creditors taking further action against you.

Many people do not know that you can file for two different types of bankruptcy: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Before you file for bankruptcy, it is important to understand which option may be better for you.

Similarities Between Chapter 7 and Chapter 13 Bankruptcy

While Chapter 7 and Chapter 13 bankruptcy are different, they do have some commonalities. First, they are available to you if you need to discharge certain kinds of debt. Second, upon filing for either, they immediately implement a protective stay which prevents creditors from pursuing debt payment enforcement options against you. This affords you a safe harbor in which you can file for bankruptcy and determine a path forward without worrying about having to fend off additional legal actions. Where Chapter 7 and Chapter 13 bankruptcy differ is the income level necessary to qualify to use either chapter, as well as how they treat certain kinds of debts and assets.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is available to individuals who can pass the income level test. Essentially, you qualify for this option if your income is lower than the median family income in Wisconsin. There are some circumstances in which you can qualify if your income is higher, so if your income is higher than the median for Wisconsin families you should consult an experienced Wisconsin bankruptcy lawyer to see if you can qualify.

Most Wisconsin residents who need to eliminate a heavy debt burden choose the Chapter 7 option. With Chapter 7 bankruptcy, you get a fresh start and the only debts you owe after your bankruptcy is discharged are secured assets of your choosing. Additionally, there is no minimum debt required to use this option, and any wages and property you acquire after filing belong to you. Finally, Chapter 7 bankruptcy cases are usually finalized in about six months.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is the only option available to you if you are behind on your mortgage or business payments, and you still want to keep your property at the end of the bankruptcy process. With Chapter 13 bankruptcy, you make up your overdue payments over time and the original mortgage agreement can remain in effect. Additionally, Chapter 13 is the only option for people who have too much income to qualify for Chapter 7 bankruptcy.

With Chapter 13, your debt payments can be reduced under a payment plan and your co-signers are immune from creditor debt collection efforts. You generally have more time to pay off your debts, and you can file for Chapter 13 repeatedly.

Filing for Bankruptcy in Wisconsin?

At Hanson & Payne, LLC, we know that filing for bankruptcy can be a scary, complicated, and emotionally difficult process. Our experienced bankruptcy attorneys will treat you with respect and professionalism and will work with you to help you find the best bankruptcy option to get you on sound financial footing as quickly as possible. If you need to file for bankruptcy, contact the Wisconsin bankruptcy attorneys at Hanson & Payne, LLC, today.