Do you remember that Tom Hanks movie from the 1980s where he and Shelley Long buy a beautiful looking house only to find out it is, as the movie’s title suggests, “The Money Pit”? The front door comes off its hinges, staircases tumble down, and a bathtub even falls through the floor. Just when they think they have identified everything that is wrong, something else breaks.
The parade of errors is funny, but also a good reminder that there’s no limit to bad luck. Just because things have been going poorly doesn’t mean they have to start turning around. Often, you need to take action to make things go your way. For many of Hanson & Payne’s clients, filing for bankruptcy is that self-initiated inflection point.
Many Milwaukee area residents and businesses use the bankruptcy process to help get their finances under control and move forward. Unfortunately, filing for bankruptcy is no guarantee that your luck is going to change.
File Soon, But Not Too Soon
Bad things can and do happen to people after they have filed for bankruptcy. That’s why it is important to figure out when filing for bankruptcy will work best for you. You should do it soon enough that it can help you salvage what you still have. But not too soon. You don’t want to risk your financial situation getting a lot worse after your case is filed.
While bankruptcy can help you deal with debts that have already accumulated, it typically cannot help with financial issues that arise after the case is filed.
What About Post-Petition Debt?
The debt you have before your case is filed is called “pre-petition debt.” The bankruptcy process is designed to deal with this debt.
Debt that you incur after your case is filed is called “post-petition debt.” Most post-petition debt cannot be addressed in a pending bankruptcy case. However, there are some exceptions to this rule.
First, some Chapter 13 petitioners may be able to have post-petition debt included in their existing bankruptcy repayment plan if the court okays it. Whether this is allowed depends on the type and amount of debt, and sometimes, the judge.
Second, if you have filed for bankruptcy under Chapter 13, you can request that your case be converted to a Chapter 7 case. If your case is converted, you should be able to include new debts in it.
If you have questions about post-petition debt or any type of debt, Hanson & Payne’s experienced team of bankruptcy attorneys is here for you. There are tactics that can be used to reduce or help you manage post-petition debt even if it cannot be forgiven.
Milwaukee Area Bankruptcy Attorneys You Can Trust
At the end of “The Money Pit,” Hanks and Long’s characters have everything fixed up, and the possibility of a happily ever after. With some help and hard work, they dug themselves out of the pit. The same thing is possible for Milwaukee area residents who find themselves in a financial hole. Hanson & Payne is an experienced bankruptcy firm that can help you when everything seems to be going wrong. Please contact us today to schedule a meeting.