Supply Chain Disruptions Push Businesses Past Their Breaking Point

The covid-19 pandemic may be waning, but pandemic-related supply chain disruptions are still causing headaches for businesses in the Milwaukee area. Hanson & Payne, LLC regularly assists local businesses that face financial difficulties due to supply chain disruptions, and we are ready to help our clients take on this additional challenge. 

According to data compiled by Bloomberg, “72 companies with at least $50 million of liabilities have filed for bankruptcy this year as of June 21… That’s well below the 118 that had sought court protection during the same period last year, but still above the 10-year average of about 65.”

These larger bankruptcies often cause small and mid-size companies to file for bankruptcy weeks or months later as the entire supply chain is disrupted when any one company is in distress. It is very much like a domino falling when a major player declares bankruptcy. 

Add to this the end of some of the federal and state relief programs aimed at reducing the impact of the pandemic, the shortage of vital products like semiconductors, rising rates and a lack of drivers in the shipping industry, and challenges caused by wild weather and labor shortages in the agriculture sector, and you can see why many Milwaukee area business owners are on edge. It is possible the worst of the pandemic is yet to come if you are looking at it through a business lens rather than from the public health perspective. 

Now, as always, Milwaukee area businesses facing financial uncertainty can count on Hanson & Payne, LLC to have their back. Our experienced team of attorneys isn’t just paper pushers. We are business-minded counselors who can help your business navigate these uncertain times. 

Sometimes bankruptcy is the best option for a business that needs to get through a tough stretch. As we often discuss on this blog, bankruptcy is a great tool, not a mark of failure. 

In other situations, it may be better to avoid bankruptcy by tapping into one of the unique aid programs being offered by the government because of the pandemic, or head to the negotiating table and directly negotiate some needed relief. 

Creditors are just as stressed as their borrowers during this difficult time, and are more than willing to be flexible. If your business is facing cash shortages and needs temporary or permanent relief from its creditors, we may be able to negotiate terms of forbearance or loan modification with your creditors.

Because we really dig into our clients’ finances and care about their businesses, we are going to help you do what is best for your business, not what is the easiest for us to manage from the legal perspective. 

Hanson & Payne’s well-established reputation as a bankruptcy firm that knows business is what drives businesses and commercial lenders from Milwaukee and beyond to rely on Hanson & Payne when they find themselves teetering on the edge. If you are in this situation, we are ready to help get you back on solid footing. Please contact our office today to schedule an initial consultation.

The Claw: The Bankruptcy Provision That Can Take Back Money That Is Rightfully Yours

A claw arcade game plays a pivotal role in the classic Disney/Pixar film Toy Story. Toy aliens in the machine are in awe of the giant claw that chooses who will go and who will stay. If you have ever seen the movie, you can probably remember exactly how the aliens say “The clawwwwwwwww!” At Hanson & Payne, we have been involved in many Milwaukee area bankruptcy cases where our clients are also in awe of a claw — the clawback of funds following someone else’s bankruptcy filing. 

The Claw

If a debtor or someone you do business with declares bankruptcy, the court may order any assets the filer transferred to you within the last few months returned to the bankruptcy court so that they can be equitably distributed among all creditors. The court uses its power to claw back the money, even though it is rightfully yours. 

While this may seem unfair to you, clawback provisions were actually created with fairness in mind. They are meant to guard against the preferential treatment of certain creditors and ensure all of a bankruptcy filer’s creditors are treated fairly. 

Clawback Defenses 

If you are willing to put up a bit of a fight to keep the money or assets you have been paid from being clawed back, the Hanson & Payne team may be able to help you. There are exceptions to the clawback rule that you may be able to take advantage of. These are known as preference defenses. 

The three most common preference defenses are: (1) the contemporaneous exchange for new value, (2) the subsequent new value and (3) the ordinary course of business defenses. Hanson & Payne’s experienced bankruptcy attorneys can help you figure out if one of these exceptions, or another less common exception applies in your situation. 

1. Contemporaneous Exchange for New Value

The most common defense against a clawback is known as the contemporaneous exchange for new value defense. It applies when the payment sent to a creditor was intended by both the debtor and creditor to be a payment for some new good or service exchanged right when new assets were transferred to the creditor. 

2. Subsequent New Value

This defense is only slightly different from the previously discussed defense. In order to claim the subsequent new value defense, the creditor must have given something of value to the debtor after payment from the debtor was received.

3. Ordinary Course of Business

Most clawback actions are filed against businesses that were going about their business with no clue their customer was in financial distress. Fortunately, the ordinary course of business defense may protect businesses hit with a surprise clawback. 

The ordinary course of business defense applies when a payment subject to clawback was received in the ordinary course of business between the creditor and the debtor. To take advantage of this defense, the creditor must be able to show that its relationship with the debtor did not change in the time period leading up to the debtor’s bankruptcy filing.

Experienced Milwaukee Area Bankruptcy Attorneys You Can Trust

While the Toy Story aliens may worship the claw, the experienced bankruptcy attorneys at Hanson & Payne know the claw is something that can be controlled. We can work with you to defend against clawbacks by putting up a strong preference defense. 

Don’t hand money or other assets that are rightfully yours over to the courts without a fight. Contact Hanson & Payne to protect your interests and secure your assets. 

Abusing The Bankruptcy System Keeps Man In Foreclosed Home For Over 20 Years

Filing for bankruptcy in order to pause a foreclosure action is a fairly common tactic. Hanson & Payne regularly assists Milwaukee area property owners and lenders in these cases

Repeatedly filing for bankruptcy and taking other legal actions that delay your eviction for over 20 years is not. That’s why it made headlines when news reports revealed some guy had been living in a home he only made one mortgage payment on for over two decades. 

Living Rent Free 

According to the New York Post, a man named Guramrit Hanspal “bought” a home on Long Island for $290,000 in 1998. He made just one mortgage payment to his lender, Washington Mutual, then defaulted on the loan. 

By May 2000, Washington Mutual successfully foreclosed on the home, and Hanspal was “forever barred” from any claim to the property, according to the judgment of foreclosure.

 

But Hanspal never left. By January 2001, he filed his first bankruptcy claim, records show. He went on to file another in November 2001, two in 2002 and one in 2003…

 

Meanwhile, in 2004, Hanspal transferred the deed of the home to a friend, Rajender Pal, even though he had no legal right to do so, according to court papers. Pal, using the Kenmore Street address, filed for bankruptcy in 2005, staving off eviction yet again…

 

By 2008, Washington Mutual had gone under, marking one of the largest bank collapses in American history, with its assets eventually taken over by JP Morgan Chase.

 

The new bank was also unable to boot Hanspal, and has been locked in litigation with him for years, with Hanspal filing at least three lawsuits against JP Morgan Chase in Nassau Supreme Court. The two sides are also in an ongoing legal battle in Brooklyn federal court.

 

Hanspal claims in court papers that Chase committed “blatant fraud” in 2010 by trying to evict him when it didn’t have proper title to the home, and accused the bank of withholding “surplus” funds from a previous auction of the property.

 

Chase slammed Hanspal for “clogging the court docket” with “patently frivolous” claims.

 

By May 2018, Chase unloaded the property to Diamond Ridge, which offered Hanspal $20,000 to leave. He didn’t take the deal, and instead, filed for bankruptcy again in 2019 and 2020. Another purported occupant of the house, Boss Chawla, filed bankruptcy four times in 2019, as did another resident — allegedly named John Smith — who filed once.

The Post estimates Hanspal has likely saved himself/defrauded his lenders of over $440,000 by not paying his bills for the past two decades. The Hanson & Payne team has seen a lot of crazy stuff during our careers, but nothing like this. 

Bankruptcy Is A Tool Not A Weapon

Filing for bankruptcy in order to stop a foreclosure is not uncommon, but in normal circumstances, the stop is a pause, not a complete halt. Filing for bankruptcy does not make a mortgage disappear, or free you from making mortgage payments while still living in your home.

If you want to stay in your home, you will need to keep making mortgage payments. It may, however, be possible to renegotiate the terms of your loan, and that is something our experienced team of bankruptcy attorneys can assist you with. 

If finding a new, more affordable place to live is an option you are willing to consider, the Hanson & Payne team can help you get rid of your current property and work towards getting out of debt. 

A Milwaukee Bankruptcy Attorney You Can Count On

Milwaukee area debtors who are considering filing bankruptcy just to avoid foreclosure should proceed with caution. Bankruptcy is meant to be used as a tool, not a weapon. Rather than making risky legal moves that could give you the kind of negative publicity Mr. Hanspal is getting, you should contact the Hanson & Payne team for some sound advice. We will listen to your side of the story, and work with you to find a path forward. 

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. 

Business Bankruptcies On The Rise Despite Drop In Overall Number Of Bankruptcies

Overall, 2020 was not a good year. We had a global pandemic, which triggered an economic crisis. As a result, you might expect to see a huge jump in the number of bankruptcies filed. But data from the courts tells a different story. Statistics released by the Administrative Office of the U.S. Courts show a 29.7% drop in the number of bankruptcies filed in 2020 compared to 2019. 

It appears that the economic stimulus packages passed by the federal government may have helped many people avoid financial ruin. Or, it could be that the worst is yet to come. The press release accompanying the court data notes that following the 2007 economic crisis, bankruptcies didn’t peak until 2010. 

Trying to predict the future is impossible, but looking at hard data can give us an idea of what is already happening and suggest trends. The data shows that while personal bankruptcies dropped significantly, business bankruptcies actually increased. Chapter 11 reorganizations rose 18.7%, from 7,020 in 2019 to 8,333 in 2020. Of those, 7,786 involved business reorganizations.

The Washington Post did a deep dive on the increase in business bankruptcies to see what types of businesses were hit hardest:

Data on a subset of businesses ― those registered as corporations ― shows that some sectors are faring much worse than others, with restaurants, retailers, entertainment companies, real estate firms and oil and gas ventures filing for protection in far greater numbers than in previous years, according to New Generation Research.

Bankruptcies filed by entertainment companies in 2020 nearly quadrupled, and filings nearly tripled for oil and gas companies, doubled for computer and software companies and were up 50 percent or more for restaurant owners, real estate companies and retailers, compared with 2019, data from the research firm shows. 

Other sectors have so far not fared as badly as one might expect, as only 77 hotel or gaming companies filed for protection in 2020, down from 92 in 2019 ― a year when the tourism industry thrived.

Wisconsin is home to businesses in all of these industries (yes, even oil and gas if you consider frac sand mining to be part of that industry). Looking at Wisconsin-specific data from the U.S. Courts, you can see the number of personal and business bankruptcies filed in each Wisconsin county during 2020. As usual, Milwaukee and the surrounding counties have the most of both types. 

We know the data on what is happening to others is of little comfort when you are struggling to keep your head above water. No matter what is happening to others, we are here for you when you need bankruptcy counsel. The Hanson & Payne team handles both personal and business bankruptcies for people and organizations in the Milwaukee area.

Blise Becomes Milwaukee’s Newest Bankruptcy Judge

Milwaukee attorney Rachel M. Blise has been appointed to fill the vacancy created when former Bankruptcy Judge Brett H. Ludwig, was appointed to the United States District Court for the Eastern District of Wisconsin last September. Blise, who took the oath office on March 17, will serve a 14-year term. 

According to the press release  announcing Blise’s appointment:

Ms. Blise earned her bachelor’s degree from Carthage College in Kenosha, Wisconsin, and her law degree, summa cum laude, from Marquette University Law School, where she served as an articles editor for the Marquette Law Review. After graduating from law school in 2010, she clerked for Fifth Circuit Judge Carolyn Dineen King in Houston, Texas. She returned to Milwaukee in 2011 and joined the business litigation and bankruptcy practice groups at Foley & Lardner LLP. She is currently Senior Counsel at the firm.

 

Ms. Blise serves on the Board of Directors for the Eastern District of Wisconsin Bar Association and co-chairs the Civil Committee. She is also a member of the Board of Directors for the Milwaukee Bar Association and a past chair of the Bankruptcy Section. She is a member of the Seventh Circuit Bar Association and a past associate member of the Thomas E. Fairchild Inn of Courts. Ms. Blise has worked on a pro bono basis for the Wisconsin Women’s Business Initiative Corporation and the Milwaukee Habitat for Humanity. In addition, she has volunteered at the Milwaukee Justice Center

The Hanson & Payne team congratulates Judge Blise on her appointment, and looks forward to appearing in her courtroom. 

We will notify any client whose bankruptcy is impacted by Judge Blise’s appointment. We are optimistic her appointment will cause no difficulties, and in fact may speed the resolution of cases in the Eastern District because it means the court is no longer short of a judge. Fortunately there was not a significant slowdown when Judge Ludwig was promoted because the pandemic was already impacting cases, and September to March is not terribly long to go without a single judge. 

Although the bankruptcy court is a federal court, vacancies on it are typically shorter than other federal court vacancies. Federal district court judges must be appointed by the President and confirmed by the Senate, a process that can take years if there is partisan disagreement. U.S. bankruptcy court vacancies are typically filled within six months because the judges are not appointed by the President. Bankruptcy court judges are instead selected by a majority vote of the circuit court judges in the jurisdiction in which they sit. It says a lot about Judge Blise that she was selected by the judges in our field to serve in her new position. 

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.

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.