Wisconsin Hospital Sues Debtors Despite Pandemic Promises

An explosive report from Wisconsin Watch and WPR revealed that Froedtert South hospital in Kenosha filed more debt collection lawsuits in 2020 than in 2019 despite pledging that it would rarely do so during the pandemic. 

According to the report: 

This year’s lawsuits collectively seek to recoup $1.1 million in alleged debt, according to a WPR/Wisconsin Watch analysis.

 

A previous Wisconsin Watch/WPR investigation found that hospitals statewide sued dozens of patients early in the pandemic. Froedtert Memorial Lutheran in Milwaukee and Green Bay-based Bellin Health Systems dismissed some of those lawsuits following the April 1 report. They were among several hospitals — including Froedtert South — that pledged to limit aggressive debt collection during the public health crisis.

 

“As a general matter, Froedtert South has suspended filing small claim suits during the COVID-19 pandemic,” J. Thomas Duncan III, the hospital’s vice president and chief operating officer, wrote in an April 1 email.

So what happened? Why did the hospital choose to file so many debt collection lawsuits after saying it was not going to do so? The hospital isn’t commenting, but as attorneys with a lot of experience in the debt collection/bankruptcy world, we have a pretty good guess. We suspect the debts were sold off to a debt collection firm in an attempt to raise money for the hospital. 

Many businesses and large institutions do not handle their own debt collection work. Instead, they sell the debt off to firms that specialize in debt collection. Organizations like hospitals do this so they can save money by freeing up staff time that would otherwise be spent on collections, and raise some quick cash. Debt collectors typically pay debt holders upfront and hope to recoup the money in collections, which is where the quick cash part comes in. 

Healthcare providers are in a cash crunch because of the pandemic. Many people have been delaying medical procedures, which reduces the amount of money coming in. Even facilities overwhelmed with COVID patients may be having cash flow issues because their regular patients are not coming in. 

How We Can Help with Medical Debts

At Hanson & Payne, we have been helping both patients and providers here in Wisconsin figure out what to do with their medical debts. 

We help providers determine when and how to get paid during this difficult period of time. We also assist patients who are weighed down by debt. Oftentimes negotiating a debt settlement is a good solution for both parties. 

Providers who are strapped for cash are willing to forgive debts in exchange for a lump-sum payment now, even if that payment amounts to pennies on the dollar. We can facilitate this negotiation and help both sides walk away in a better position than they were. 

The Hanson & Payne team is committed to being there for Milwaukee area families and businesses during this challenging time. Our experience representing both creditors and debtors gives us an edge at the negotiation table, and in the courtroom. If you are looking for legal counsel in this challenging time, we would be honored to take your call. Contact us today to schedule an initial consultation.

Delay in Unemployment Benefits Leads to Bankruptcy

Wisconsin is one of a handful of states that is struggling to disperse Coronavirus relief money allocated by Congress. The delay is so bad it has forced some Wisconsin residents to file for bankruptcy. While bankruptcy may be a good option for some people in financial distress, rushing into bankruptcy could cause you more harm than good. 

Delayed Benefits Cause Distress 

Back in March 2020, when we were just beginning to grasp how serious the pandemic would be, Congress passed a COVID relief bill that increased the value of unemployment benefits and expanded unemployment benefits to workers who are not usually eligible for them — like those who are self-employed or work in the gig economy. It was a much-needed boost for those whose lives have been turned upside down by the pandemic. 

Unfortunately, Wisconsin’s Department of Workforce Development struggled to distribute the new benefits. They blamed their ancient computer system, which is just not equipped to handle the spike in claims and changes in benefit eligibility and levels. Months later, some people were still waiting on their money

When Congress voted to provide additional benefits to the public in December, the same thing happened again. It may be late April before the benefits authorized in December are ultimately distributed. 

Unemployed Look to Bankruptcy System for Relief

There is only so long you can wait for benefits before you have to take whatever action you can to keep yourself afloat. Wisconsin Public Radio reports that people waiting for benefits have “tapped into personal savings, gone into credit card debt and resorted to selling things in an effort to make ends meet.” The Journal Sentinel talked to one woman who chose to file for bankruptcy after her benefits were delayed. 

While bankruptcy may be a lifeline for those in financial distress, timing is really important in bankruptcy law. Talking with an experienced bankruptcy attorney about whether bankruptcy is right for you right now can save you from making a financial mistake out of desperation. 

Timing Is Everything 

There are two timing-related issues to keep in mind when considering filing for bankruptcy. The first is that filing before you hit rock bottom, or before you find yourself on an upswing, means you may go into more debt after filing that you could have otherwise had forgiven if you had waited a bit longer to file. 

The second timing-related issue to keep in mind is that filing for bankruptcy now prevents you from filing again for several years. If you think things are going to get worse over the next couple of years, it might be better to wait to file. 

It is not fun to think about your life getting worse than it is right now when you are already experiencing a lot of financial pain, but it is something you need to consider. 

If you need advice about when to file for bankruptcy, the Hanson & Payne team is here to help. Please contact us today to schedule an initial consultation. 

Hot Housing Market Causes Financial Trouble For Homeowners

One of the unforeseen impacts of the COVID-19 pandemic is how hot it has made the housing market. Some Milwaukee area residents may be priced out of their own homes or pushed toward bankruptcy if this trend continues. 

Hot, Hot, Hot!

Moving is not a fun task during the best of times, so why are people clamoring to do so in the middle of a global health crisis? Two reasons: space and record low-interest rates. 

As we all spend more time at home in order to avoid the virus, personal space becomes a hot commodity. People want home offices, a room for the kids to do virtual school, and a backyard to spend time in when the weather is nice. 

Record low-interest rates also played a huge role in driving up home prices. According to the Wisconsin Realtors Association, “The 30-year fixed mortgage rate fell to 2.68% in December, which is a new record low. To put this in perspective, that rate is a full percent lower than 12 months earlier and almost two percentage points lower than two years ago.” 

Prices Are Going Up, and So Are Taxes

These two factors have given a significant boost to the real estate market. “All regions of the state experienced an increase in sales during 2020. The strongest growth was seen in the North region, up 14.7%. There were four regions — Central, South Central, Southeast and West —  that saw home sales grow between 6.5% and 7.4%, and the Northeast region grew by 4.6% in 2020.”

“When demand far outpaces supply, like it did this year, you get double-digit price increases, which is what we saw in 2020,” said WRA President & CEO Michael Theo.

Local municipalities have taken note of these price increases and rushed to reassess the homes in their area so they can rake in more tax dollars. 

Putting Homeowners in Dire Financial Straits 

“Some City of Milwaukee property owners are at a loss after getting their 2020 property tax bills as the city’s assessment commissioner points to rising home sale prices, particularly in neighborhoods like Harambee, Bay View and Riverwest,” according to a report from Fox 6.

The Fox 6 report talked to two homeowners who saw their property taxes increase by 61% and 37% respectively. As the gentleman whose property taxes increased by 61% noted, “It’s a lot for everybody in these stressed economic times.”

Your Milwaukee Bankruptcy Attorney

These astronomically high property tax increases put a lot of financial stress on families at a time when they can least afford it. They have pushed some families out of their homes and made others consider filing for bankruptcy. 

Unfortunately, taxes are not discharged when you file for bankruptcy. But that does not mean that there is no way to get help if you cannot keep up with rising property tax rates. If you are in financial distress, the experienced attorneys on the Hanson & Payne team can help you figure out what your options are, and guide you forward. Contact us today to schedule an initial consultation.