Is Bankruptcy a Good Idea?

Deciding whether to file for bankruptcy can be difficult. It doesn’t help that there’s so much misinformation out there about bankruptcy. For example, a common belief is that bankruptcy permanently ruins your credit. Another is that people who file for bankruptcy are irresponsible. This couldn’t be further from the truth. In this article, we take an objective look at whether it’s a good idea to file for bankruptcy when you’re experiencing financial difficulties. 

What Causes Bankruptcy? 

As noted above, a common myth is that people who file for bankruptcy are irresponsible with money. Some are, of course, but many aren’t. People are often forced into bankruptcy due to circumstances that are beyond their control. Common reasons for bankruptcy include:

COVID-19: Many people have been forced to file for bankruptcy due to the current COVID-19 pandemic. Governments have shut down businesses in an effort to stop the spread of the virus, leaving many people with no way to make a living. 

Unforeseen illnesses: In addition, many people are forced to file for bankruptcy due to unforeseen illnesses. Often, when a person gets sick or injured, he or she is burdened with a growing stack of medical bills. Many people simply can’t afford to keep up with the bills associated with unforeseen illnesses.

Spending by a family member: Some people are forced to file for bankruptcy due to the actions of others, such as spending by a family member. 

Why Does Bankruptcy Have a Bad Reputation?

The false correlation between financial irresponsibility and bankruptcy contributes greatly to its bad reputation. In addition, many people believe that bankruptcy irreversibly damages one’s credit score. This simply isn’t true. Yes, bankruptcy does temporarily damage the credit score of the filer. However, this certainly doesn’t last forever. In fact, many people are surprised how quickly their credit bounces back after filing for bankruptcy. 

Deciding if Bankruptcy is Right for You

Whether bankruptcy is a good idea for you ultimately depends on your individual circumstances. Bankruptcy isn’t inherently bad or good. However, it can be extremely useful for people who have run into financial difficulties. The purpose of bankruptcy is to discharge debts and allow debtors to get back on track financially. Therefore, if you need a fresh financial start, it’s quite possible that bankruptcy may be a good option for you. However, to be sure, you should contact a Milwaukee bankruptcy lawyer for assistance. 

Contact a Milwaukee Bankruptcy Lawyer 

If you would like to explore your bankruptcy options in Milwaukee, you should contact an experienced Milwaukee bankruptcy lawyer as soon as possible. At Hanson & Payne, our experienced bankruptcy attorneys offer bankruptcy and debt negotiation services for individuals in Milwaukee and all over southeast Wisconsin. Therefore, if you think bankruptcy may be the right choice for you, please contact us as soon as possible to schedule a consultation. 

Avoid These Common Bankruptcy Mistakes

If you’re considering filing for bankruptcy, you probably have a lot on your mind. After all, bankruptcy can be confusing and stressful. However, the one thing you can’t do is allow yourself to get overwhelmed—this can only lead to mistakes. Luckily, by enlisting the help of a Milwaukee bankruptcy lawyer and reviewing the information below, you can drastically reduce your odds of making mistakes during the bankruptcy process. Below are some of the most common bankruptcy mistakes. 

Tips to Avoid Bankruptcy Mistakes

Using credit cards right before filing: Using credit cards right before filing for bankruptcy is a bad idea. Although some credit card use is permissible before filing for bankruptcy, you’re better off avoiding credit cards altogether. The reason being that if you overuse them, the bankruptcy court will make you pay them off, and this defeats the purpose of the “fresh start” that bankruptcy provides. 

Repaying friends and family before filing: If you owe money to friends and family, you may be tempted to pay them back right before you file for bankruptcy. Don’t do it. You can’t treat your friends and family any differently than you would a creditor when it comes to repaying debts. If you do, the bankruptcy trustee in your case may come after those you paid back to collect the money. 

Using 401K funds to repay creditors before filing: Retirement accounts are usually protected when you file for bankruptcy. In most cases, you can discharge your debt and keep whatever you have in your retirement account. You have nothing to gain by paying off debt with retirement account money before filing for bankruptcy. 

Taking out a second mortgage to pay off credit card debt before filing: Don’t take out a loan against your real estate before filing for bankruptcy. It’s often possible to file for bankruptcy and keep your home. However, if you take out a second mortgage to pay off credit card debt or to reduce the equity in your home, you may be putting your home at risk.

Failing to appear in court for debt-related matters: If you have court obligations related to your debt, you can’t simply stop showing up in court after you file for bankruptcy. Rather, you must wait until the court officially dismisses your collections case. 

Failing to be truthful with your attorney: If you plan on filing for bankruptcy, you need an attorney. However, you must be truthful with your attorney. An attorney’s representation is only as good as the information you provide, so provide your attorney with the most accurate information possible to ensure that your bankruptcy case is a success.  

Contact a Milwaukee Bankruptcy Lawyer 

If you would like to explore your bankruptcy options, you need an experienced Milwaukee bankruptcy lawyer on your side. At Hanson & Payne, we offer bankruptcy and debt negotiation services for individuals in Milwaukee and all over southeast Wisconsin. Please contact us today to schedule a consultation. 

How to Keep Your Spending in Check During the Holiday Season

The holiday season can get even the most careful shoppers into financial trouble. During the holidays, it’s easy to let debt get out of control. And when debt gets out of control, debt collectors come calling. If you’d like to keep the debt collectors at bay this holiday season, follow these tips to keep your holiday spending in check. 

Tips to Keep Your Spending in Check

Make a budget (and stick with it): Creating a budget is the first step towards a debt-free holiday season. Of course, a budget alone is useless unless you stick with it! The best way to create a budget is to review your income, expenses, and savings to determine much money you can allocate towards holiday gifts. Next, create a list of the gifts you’d like to purchase. If your gifts cost more than your budget allows, keep tweaking your gift list until you get it right. 

Avoid credit cards: Credit card debt can snowball (no pun intended) during the holidays if you let it. Therefore, you must be cautious when using credit during the holiday season. In fact, if you stick to your budget, you should be able to avoid using credit altogether to purchase your holiday gifts. Making it through the holidays without using any credit should be your top priority. 

Don’t buy yourself gifts: People sometimes buy a few things for themselves while shopping for others during the holidays. However, this is a surefire way to overspend. By foregoing gifts for yourself until after the holidays are over, you greatly improve your odds of sticking to your holiday budget. 

Keep your gift receipts: Obviously, it’s a good idea to hold onto gift receipts for returns. However, there are other reasons to do so as well. For example, some stores have big sales after the holidays are over. If you purchase an item that goes on sale after the holidays, the store may refund the difference if you provide the receipt. 

Don’t give too generously: It feels great to give generously during the holidays. However, you don’t want to give too generously. None of your friends or family members want you to suffer financially in order to give them gifts. Therefore, make sure that you only purchase gifts that will allow you to stay within your holiday budget. 

Contact a Milwaukee Bankruptcy Lawyer 

If you are having financial issues and want to explore your bankruptcy options, you need an experienced Milwaukee bankruptcy lawyer on your side. At Hanson & Payne, we offer bankruptcy and debt negotiation services for clients all over southeast Wisconsin. Our experienced attorneys understand that filing for bankruptcy is a big decision, so we are committed to providing you with the information and guidance necessary for you to make an informed bankruptcy decision. Please contact us today to schedule a consultation.