Frank Lloyd Wright’s Bankruptcy And Bounce Back

Wisconsin native Frank Lloyd Wright is America’s most-loved architect. During the 70 years he was actively working, he designed over 1,000 structures — including many here in the Milwaukee area. Because of his fame, many people assume he was a success from the start, and never knew hardship. The truth is Wright suffered a mid-career slump that drove him into bankruptcy, and nearly into obscurity. 

Wright, who grew up near Spring Green and attended the University of Wisconsin, had success early in his career working for the famous Chicago architects Joseph Lyman Silsbee and Louis Sullivan. He then went out on his own and quickly began to make a name for himself. He pioneered what became known as the Prairie School of architecture, with its focus on building structures that highlight their natural surroundings. 

However, his reputation as an architect was soon sullied by his salacious personal life. He abandoned his wife and children in order to hide out in Europe with the wife of one of his clients. A few years later, his mistress, her children, and several other people were murdered at Wright’s famous home/studio, Taliesin. A servant set fire to the home, then bludgeoned people with an ax as they tried to escape. 

As his architectural commissions slowed down, Wright made ends meet by dealing in Japanese art. He even used prints as collateral for loans. “In 1926, the Bank of Wisconsin foreclosed on the mortgage on Wright’s Taliesin property and sent 346 choice prints from Wright’s collection to be auctioned at the Anderson Galleries in New York. The sale brought a mere $36,000.”

Being evicted from Taliesin and declaring bankruptcy was Wright’s low point. Getting a fresh financial start, and meeting his third wife allowed him to bounce back both professionally and personally. He bought back Taliesin, built a Taliesin West in Arizona, and started a celebrated architectural school. By the time he turned 70, he was the most well-known architect in America. He continued working until his death at the age of 91. Eight of his buildings — including Taliesin and the Herbert and Katherine Jacobs House here in Wisconsin — were recently added to the UNESCO World Heritage list.

Wright did not let his failures define him. Instead, he overcame them and moved forward with his personal life and career. He went on to bigger and better things, and built a reputation that endures to this day. We can all learn something from this. 

If you are buried under an insurmountable pile of debt and need a way out, Hanson & Payne is here for you. Our experienced team of attorneys helps people and businesses in the Milwaukee area use bankruptcy to get a fresh start. We are experienced with both Chapter 7 and Chapter 13 bankruptcies and can advise you which chapter would work best for you. Please contact us to schedule an initial consultation. 

John Oliver Pillories The Personal Bankruptcy System

In a recent episode of his popular talk show on HBO, comedian John Oliver took a deep dive into the personal bankruptcy system. He was not impressed by what he found. 

Oliver used his trademark brand of hard truths and humor to report:

  • Chapter 7 and Chapter 13, both ways of filing for personal bankruptcy, are very different from one another. Some people who should file for Chapter 7 are being steered toward Chapter 13, and they end up deeper in debt and worse off than they would have been had they done nothing to address their debts.
  • African-Americans are disproportionately steered toward Chapter 13 when Chapter 7 would be more appropriate for them. 
  • Some of the organizations that offer mandatory credit counseling are focused more on helping filers check a box than offering meaningful counseling. 
  • There is still a stigma attached to filing for bankruptcy. 

All of these things are unfortunately true. Let’s go through them one at a time. 

Chapter 7 & Chapter 13 Are Very Different From One Another 

There are two different chapters of the bankruptcy code that most personal bankruptcies are filed under — Chapter 7 and Chapter 13. Chapter 7 bankruptcies are traditional bankruptcies where all but a few assets are sold off, the proceeds of the sale are used to pay off creditors, and most remaining debts are forgiven. Chapter 13 is a court-supervised repayment plan. If you make all of your Chapter 13 payments during the 3-5 year period your plan is in place, most of your remaining debts are forgiven.

These two processes are very different. It is therefore important to work with an experienced bankruptcy attorney that can advise you which chapter would work better for you. As Oliver notes, too many people who might be better served by Chapter 7 are being steered toward Chapter 13. At Hanson & Payne, we always go through all of a client’s options, and never push them to do something that would not be in their best interest. 

African-Americans Are Disproportionately Steered Toward Chapter 13 

Oliver notes that a disproportionate number of the people who are steered toward Chapter 13, but should probably file under Chapter 7, are African-Americans. This is unacceptable. 

The Hanson & Payne team is committed to providing all of our clients the legal counsel they deserve, regardless of the color of their skin. Milwaukee is a multicultural city, and we are proud to serve everyone who calls it home. 

Mandatory Credit Counseling Falls Short Of Its Potential 

Oliver notes that taking a credit counseling class is mandatory in the modern bankruptcy system. He then highlights some research indicating the classes are not always helpful. 

Whether you just want to check the box saying you did the required counseling, or you want to do some hands-on work with an experienced financial advisor, the Hanson & Payne team can point you in the right direction. There are a number of approved credit counselors serving debtors in the Eastern District of Wisconsin

The Stigma Of Bankruptcy

One of Oliver’s biggest complaints is that people who file for bankruptcy still face harsh public scrutiny. We can all work together to erase the stigma of bankruptcy. 

Remember, filing for bankruptcy is not a moral failure. Bankruptcy is more often the result of bad luck than it is bad choices. 

Experienced Bankruptcy Attorneys In The Milwaukee Area

Bankruptcy is a complex area of law. Filing for bankruptcy will have a huge impact on your life. Working with an experienced bankruptcy attorney, like those of us here at Hanson & Payne, can help ensure that your bankruptcy experience is as helpful and straightforward as you deserve it to be. If you are considering filing for personal bankruptcy, Hanson & Payne is here for you. Please contact our office to schedule an initial consultation. 

Bankrupt Businesses Can Now Benefit From PPP Loans

They say timing is everything. Nowhere is that more true than in the bankruptcy world. Filing too soon or too late could mean the bankruptcy laws do not work as well for you as they do for other people or businesses. The most recent example of this comes courtesy of the pandemic. 

The Paycheck Protection Program (PPP) is a federal loan program created as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The loans, which are backed by the Small Business Administration (SBA), are designed to provide a direct incentive for small businesses to keep their workers on payroll during the economic slowdown caused by the COVID-19 pandemic. 

Many businesses have used PPP loans to stave off bankruptcy during the pandemic. But what about companies that were already in bankruptcy? As we have mentioned on this blog many times, a lot of companies that file for bankruptcy are not closing up shop. Bankruptcy is a great tool for companies that want to reorganize and refocus so they can move forward. These companies go into and through bankruptcy while still operating.

When Congress passed the Consolidated Appropriations Act in December, it authorized bankruptcy courts to approve PPP borrowing by debtors who had filed under Chapter 11, 12, and 13. (Note – bankruptcy filers must typically get the court’s permission in order to take on more debt.) 

However, the law indicates that the loans will only be available once the SBA submits a written determination to the Executive Office of the U.S. Trustee—the Justice Department’s bankruptcy watchdog—that eligible debtors can apply for PPP loans. The SBA has not yet sent the required note. The agency has, however, put out new guidance indicating that it does not consider businesses with a court-confirmed reorganization plan to be in bankruptcy. This makes those companies eligible for PPP loans. 

Some bankrupt businesses are now racing to get their reorganization plans approved so they can apply for PPP loans before the May 31 deadline. Hanson & Payne is working with our Milwaukee area clients interested in speeding their reorganization so they can get PPP funds. The bankruptcy courts are aware this is happening, but it is unclear how accommodating they can be based on the tight timeline. 

At Hanson & Payne, our team of experienced bankruptcy attorneys is always looking out for changes in the law that may benefit our clients. Sometimes those changes are to the bankruptcy laws themselves. Other times, like now, the changes are to other laws that are not necessarily drafted with bankrupt parties in mind. Our years of work in this area and our problem-solving approach to the law mean we are always finding new ways to help our Milwaukee area clients move forward. 

If you have questions about PPP loans and bankruptcy, or just questions about bankruptcy in general, Hanson & Payne is here for you. Please contact us today to schedule an initial consultation.