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.