Loan Modification May Help Your Business Avoid Bankruptcy

One of the things that sets Hanson & Payne apart from other bankruptcy attorneys in the Milwaukee area is our experience working with creditors. We have a strong relationship with many of the major banks in the great Milwaukee area because we have represented them in commercial loan transactions, bankruptcy matters, or insurance disputes at one time or another. 

While some debtors decide not to hire us after finding out we work for both debtors and creditors, the smart ones realize the edge our diverse practice gives them at the negotiating table. 

Over the years, we have developed strong relationships with the lenders and other attorneys whose cooperation and patience are a necessary component of any successful loan modification. We also know which lenders are willing to negotiate with a debtor in order to help keep a business afloat, and what sort of deals they have cut in similar situations. We put this knowledge to use for our business clients who wish to stave off bankruptcy and remain in business. 

If you are interested in seeking a business loan modification or workout, you need to be proactive. Don’t wait until you are several payments behind before taking action. (If you are already in default, take action right away.)  Lenders are more willing to work with “good” debtors who have been paying than those that they perceive as “bad” because they have missed a payment or two. 

Preparing to Talk to Your Lender

Reinforce your lender’s opinion that you are being proactive and addressing your financial problems head-on by doing some advance planning before giving your lender a call. 

First, gather up relevant financial documents: 

  • All the documents related to your current loan;
  • Recent tax returns;
  • Bank statements;
  • Your current business ledger; and 
  • Anything else you think might be helpful. 

Every lender handles their modifications differently, and one lender may require less or different information than another, but having as much information as possible on hand shows you are taking this seriously. 

It is also a good idea to update your business plan. Be prepared to show your lender how you intend to address the issues you are facing and increase your profits over the long-run. 

Finally, you will need a hardship letter explaining your current situation. This letter is something we suggest working on with someone who has loan modification experience. It needs to succinctly explain your situation, using facts and figures to bolster your request. 

While we always recommend getting professional help if you are seeking a loan modification, we urge you to be cautious about who you rely on for assistance. There is a whole industry of “loan modification specialists” who make it sound like they are particularly skilled at modifications. The truth is, most of these people are nothing more than paper-pushers who serve as a middleman between you and your lender. They cannot offer legal advice, and their financial advice is suspect at best because they are not regulated or licensed. The worst of these folks are scam artists who are looking for easy identity theft targets. 

Our firm has many years of experience seeking loan modifications on behalf of business owners in the Milwaukee area. If you are interested in seeking a modification, but you don’t know where to start, start by contacting our office to schedule an initial consultation.  

Are the Boy Scouts Dodging Responsibility By Filing For Bankruptcy?

The Boy Scouts of America (BSA) has a rich history in the Milwaukee area. There are over 8,000 scouts in Kenosha, Milwaukee, and Racine counties, and they do lots of merit-badge earning and community service. When the BSA declared bankruptcy earlier this year, many people feared that the organization would soon cease to exist. Others suggested the bankruptcy was allowing the organization to shirk responsibility for the harm it has caused. 

The reality is the bankruptcy is probably a boon to the struggling organization and is a way for the BSA to finally take responsibility for its actions instead of sweeping them under the rug. 

What Led to the BSA’s Bankruptcy?

The BSA has been in decline for decades. Its membership peaked in the early 1970s. In recent years, it has tried to boost membership by allowing girls and openly LGBTQ scouts to join its ranks. These changes have helped a little bit, but they also caused the Mormon church to pull its support from the organization and start a competing group. 

Bankruptcy will allow the organization to restructure and move forward with a new vision for the future. What this means for local councils is unclear. It is possible that the BSA will consolidate councils, lay off staff, and sell off some of its campgrounds. We’ll have to wait and see what happens. 

Hopefully, the organization will also take its time in bankruptcy to do some soul-searching. Almost since its founding, over 100 years ago, BSA knew it was a magnet for sexual predators looking for easy access to young boys. Instead of calling attention to the problem and attempting to do something about it, the BSA kept secret files on volunteers it knew or suspected were abusing scouts. They rarely shared any of the information they had with the police. 

One of the only things BSA did to try and curb abuse was ban LGBTQ scouts and volunteers. It only recently acknowledged that being queer does not make you a sexual predator.

Now, the day of reckoning has come. The BSA was forced to file for bankruptcy because it was being hit with so many lawsuits by abused scouts. If the organization continued to fight each of these cases individually, it would be bled dry. 

Why This Matters

Filing for bankruptcy will allow the organization to address the claims against it head-on. Other organizations in similar circumstances have set aside pots of money that victims can make claims against under the supervision of the bankruptcy court. The victims will have a quick and easy way to make a claim for compensation, and the organization will take a hit, but be able to regroup. 

It is important to note that if this is indeed what happens, victims will only have this one shot at justice. The bankruptcy takes all potential and outstanding claims and rolls them into one. This is why some people claim BSA is shirking its responsibility. This is a valid concern, but it is also likely that many abused scouts would not make any claim at all if the bankruptcy did not happen. They would either suffer in silence because bringing your own individual lawsuit is quite the undertaking. Or they would file suit too late, and the organization would be out of money and closed down by the time their lawsuit was tried to a verdict.

If you have questions about the Boy Scout Bankruptcy, or how bankruptcy impacts liability, let’s talk. Contact us today to schedule an initial consultation. 

Milwaukee May Soon Lose A Bankruptcy Judge

There may soon be a vacancy on the bench in the United States Bankruptcy Court for the Eastern District of Wisconsin. Judge Brett Ludwig, who currently serves as a bankruptcy judge here in Milwaukee, has been tapped by President Trump to fill a long-vacant seat on Wisconsin’s federal district court. This is quite the promotion. 

Moving On Up? 

However, Judge Ludwig is not switching offices just yet. His appointment must be confirmed by the United State’s Senate. According to the Milwaukee Journal Sentinel, Wisconsin Senators Tammy Baldwin (D) and Ron Johnson (R) both approve of Ludwig’s nomination. Their bipartisan support is a sign that Judge Ludwig’s confirmation is likely, although the timeline is uncertain. 

Judge Ludwig has served as a bankruptcy judge since February 2017. Prior to that, he was a partner at a large Wisconsin law firm. He is a graduate of University of Wisconsin-Stevens Point and the University of Minnesota Law School.

As mentioned above, if Ludwig is confirmed, he will fill a federal court judgeship that has been vacant for some time. He would be taking the place of Judge Rudolph Randa, who passed away in 2016. It is not uncommon for federal district court seats to sit vacant because there can be political hurdles to filling them. 

Switch Would Open Up A Seat On Milwaukee’s Bankruptcy Court

Thankfully, bankruptcy court seats are not typically so difficult to fill. While federal district court judges must be appointed by the President and confirmed by the Senate, U.S. bankruptcy court judges are appointed by a majority vote of the circuit court judges in the jurisdiction in which they sit. It typically takes around six months for a new judge to be appointed when a bankruptcy court vacancy opens up. 

One reason for this difference in selection is that bankruptcy court judges are not awarded lifetime tenure. Instead, they are appointed to renewable 14-year terms. In practice, many of these judges end up serving multiple terms, often until they retire. It is understandably difficult to resume private practice after being in public office for over a decade. 

A Full-Service Bankruptcy Firm

The Hanson & Payne team is paying close attention to Judge Ludwig’s nomination, and any potential bankruptcy court vacancy that may open up should he be confirmed as a district court judge. We will notify any clients who have cases before him if he is suddenly swept into his new role. We will also alert our clients if it appears a vacancy on the bankruptcy court is impeding court operations, and slowing down cases. 

If you are a Milwaukee area resident or business who is considering filing for bankruptcy, the Hanson & Payne team is ready to help. Our experienced attorneys handle both personal and commercial bankruptcies. We also do quite a bit of work for creditors and local banks. Please contact our office today to schedule an initial consultation.