We’ve written a series of blog posts answering questions regarding the financial impact of debt collection and bankruptcy. Call (262) 827-0375

Key Considerations of Debt Consolidation

Do you feel like you’re being nickeled and dimed to death with all of your monthly financial obligations? Maybe you’ve seen ads about debt consolidation where you just pay one time and your debt actually decreases. In this post, we will look at debt consolidation and explore its implications.

Debt Consolidation: What Is It?

In its most basic form, debt consolidation works by combining multiple debt payments into one monthly payment through obtaining either a secured or unsecured loan. That monthly payment is sometimes lower than the individual payments combined, and the interest you pay is sometimes lower as well. You will maintain your access to credit, though incurring more debt increases the likelihood of the debt consolidation failing.

How To Do It: Unsecured

One of the easiest ways to consolidate your debt is to obtain a new credit card that offers 0% interest for a period of time (usually 6 to 12 months). Once you get the card, you can transfer the balance from other credit cards where you are paying high interest to the new card and use the 6 to 12 months to pay down the principal. Of course, that only consolidates your credit card debt. And if you’re already behind on your monthly payments to your credit cards, you are unlikely to qualify for a new credit card. Since credit cards are unsecured loans, this method of debt consolidation can decrease your indebtedness without risking collateral.

How To Do It: Secured

Alternatively, you can take out a debt consolidation loan. There are a number of financial institutions offering debt consolidation loans though almost all are secured loans. That means that you must put up assets as collateral, usually your car or home. If you do not adhere to the repayment plan, you risk losing your collateral. There is an additional danger if your debt consolidation loan comes from the same financial institution that services other loans you have, like your car loan. It’s a hidden danger called cross-collateralization.


You may risk losing collateral that you aren’t aware you have placed in jeopardy. That can happen when your debt consolidation loan has a cross-collateralization clause that lets the lender take other property it has financed if you default on the debt consolidation loan. For example, if you get your debt consolidation loan through the same bank that financed your car, under the cross-collateralization clause, if you default on the debt consolidation loan, the bank could repossess your car—even if the car payments are current.

Debt Management Plans

Some people go to an agency that creates a debt management plan for them and negotiates with the credit card companies on your behalf. It’s important for you to know that agreeing to a debt management plan comes with a number of hidden costs – monetary and otherwise. You will be expected to pay an enrollment fee as well as a monthly fee for each credit card on the plan. Also, most credit card companies will require that an account entering into a debt management plan be closed, so you lose your access to credit. And the fact that you’re engaged in a debt management plan will be noted on your credit report. Most debt management plans run for three to five years, and at least half of clients do not successfully complete the plan.

Negative Tax Consequences

Depending on your financial condition, any money you save from debt relief services such as debt consolidation may be considered income by the IRS, which means you pay taxes on it. Credit card companies and other creditors may report settled debt to the IRS, which the IRS considers income.

Debt consolidation sounds like the perfect solution on the surface, and it may well be your best option. However, you should be aware of all of the implications of debt consolidation before you enter into it. Contact the experts at Burr Law; they will give you the best advice for your particular situation.

Understanding Your Credit Report

Finances are complicated, and they are further complicated by your credit report. Your credit score fluctuates constantly, and knowing how various things will affect your credit report is important to your overall financial planning. Here, we’ll explore the various factors that cause your credit score to go up or down, and how long those factors will continue to affect your credit score.

Fair Credit Reporting Act

The Fair Credit Reporting Act–also known as the Consumer Credit Protection Act–was enacted on October 26, 1970. It is designed to protect the integrity and privacy of a person’s credit information. It requires credit reporting agencies, and those that report credit information to those agencies (like credit card companies), to make sure all information is fair, accurate and confidential. Information in a consumer report cannot be provided to anyone who does not have a purpose specified in the Act.

Components Of Your Credit Report

Before exploring how various actions affect your credit report, it’s important to know how your credit score is calculated. Not every action has the same impact. Here is how your credit score is determined:
Payment history – 35%
Amounts owed – 30%
Length of credit history – 15%
Credit mix – 10%
New credit – 10%
This makes up your FICO credit score, the most common method used. Obviously, payment history is crucial and it’s important to remember that even if a company does not report your usual on-time payments, they will certainly report a missed or late one.

Time Frame

Your credit report is not a static document. Your credit score changes all the time, and actions that have lowered your credit score do disappear from your credit report. The time frame varies from two to ten years. Generally, those negative actions will fall off your report after seven years. Another thing to understand is that the severity of the impact diminishes with time, too. So a bankruptcy five year ago will matter less than when freshly filed.

Credit Inquiries

One of the most insidious ways that your credit score can be lowered comes from credit inquiries. Also called “hard inquiries” or “hard pulls,” a credit inquiry of this type happens when you apply for another credit card. It’s important to know that even department store credit cards can cause a hard pull. Credit inquiries remain on your credit report for two years, and can have a negative impact on your credit score—from 5 to 20 points per pull.

Seven-Year Itch

Most negative actions will remain on your credit report for 7 years. These include debts that have gone into collection, charge-offs (where the business is no longer actively trying to collect the debt), and late payments that are over 30 days past due. The later the payment, the worse it is for your credit score. It also includes Chapter 13 bankruptcy, starting from the date of filing. Chapter 7 bankruptcy stays on your credit report for 10 years.

Credit Repair

When you have financial difficulties, your credit score will be impacted, whether or not you declare bankruptcy. This impact does not have to be devastating, and it can be mitigated. The experts at Burr Law can guide you in re-establishing your credit in ways that meet your particular situation. Remembering that payment history is crucial, and that many accounts do not typically report on-time payments, you can work to have your timely payments noted. While auto loans, mortgages, credit cards and some others are typically reported, other things like utilities, phone payments, and even streaming services can be reported. If you have a monthly expense that isn’t being reported and you want those timely payments to count toward your credit score, Burr Law can help.

Understanding your credit report can lessen your anxiety around declaring bankruptcy. When your credit score is suffering from late payments and debts in collection, bankruptcy isn’t going to make things worse. It can make things a lot better, and the professionals at Burr Law can guide you in repairing your credit too.

Overwhelmed with Debt?

The COVID-19 pandemic has had dire economic consequences for many people, and there have been protections put in place to help people survive this difficult time. Those aren’t going to last forever, though, and you may be looking at your financial situation and wondering just how you’re going to manage. If you feel overwhelmed with debt, it’s important to think things through now and have a plan in place while you still have a number of options. There are basically three different approaches you can take: debt consolidation, debt management, and bankruptcy. This post explores each of them.

Debt Consolidation

Debt consolidation is just what it sounds like: you gather all your debts into one place so that you’re making one payment a month. There are several ways to consolidate your debt. If most of your debt is unsecured credit card debt, you can take out another credit card that offers 0% interest for a period of time (often 12 to 18 months) and then transfer your other credit card debt onto that new card. You then have that given time to pay down the principal. This method only works if all or most of your debt is credit card debt. If you have other sources of debt, you may need to take out a consolidation loan. These loans are financed by banks, and the main concern here is that you trade your unsecured debt for secured debt, as most will require collateral. Even if your consolidation loan doesn’t require specific collateral, it may well have a cross-collateralization clause. That means that if you get a consolidation loan from the same bank that financed your auto loan, and you fall behind on your consolidation loan payments, the bank can repossess your car. So debt consolidation can certainly work, though it has some important limitations, and poses some significant risks.

Debt Management

There are a number of debt management companies that will act on your behalf to manage your financial situation. The debt management company negotiates with the credit card companies on your behalf, and establishes a repayment plan for you. It’s important for you to know that agreeing to a debt management plan comes with a number of hidden costs – monetary and otherwise. You will be expected to pay an enrollment fee as well as a monthly fee for each credit card on the plan. Also, most credit card companies will require that an account entering into a debt management plan be closed, so you lose your access to credit. And the fact that you’re engaged in a debt management plan will be noted on your credit report. Most debt management plans run for three to five years, and at least half of clients do not successfully complete the plan.


Individuals usually file either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is known as “liquidation” bankruptcy, and in order to qualify for it, you must not make more than your state’s median household income. In Wisconsin, that amount is $67,355 (as of 2019, the latest available figures). Although the word liquidation sounds threatening, the truth is that there are exemptions and you will almost certainly keep your home (if you have a mortgage) and your car. If you have a second home or other luxury item, those may be sold to pay your debt. Chapter 7 bankruptcy is quick, usually taking three to four months, and it eliminates all your unsecured debt. Chapter 13 bankruptcy is also known as “wage-earner’s” bankruptcy. It functions a lot like the debt management plan; a trustee appointed by the court drafts a plan, you and your creditors agree to it, and then the trustee administers the plan. It lasts between 3 and 5 years. There is no means test like Chapter 7 bankruptcy, but there is a cap on how much you owe. To be eligible to file for Chapter 13 bankruptcy, you must have less than $419,275 in unsecured debt, like credit cards or medical bills, and you also can have no more than $1,257,850 in secured debts, which includes mortgages and car loans.

If you’re overwhelmed by debt and considering your financial future, you have options. Contact the experts at Burr Law to talk through your specific situation, and have them help you chart the best course forward.

How Does Debt Relief Affect Your Credit?

The unrelenting pressure of overwhelming debt can cause all kinds of problems outside of the financial realm. It can affect your love relationship, your familial interactions, and your physical and mental health. You know you need debt relief, but worry that pursuing it may further deteriorate your credit score. In this blog post, we will examine the different kinds of debt relief and their implications for your credit.


Debt Management – What Is It

With debt management, the entirety of your financial situation is reviewed by a credit counselor, who then creates a debt management plan for you to follow. Generally these are for terms of three to five years, and often you must agree not to seek any additional credit during the time that the debt management plan is in place. Some organizations may take control of your monthly payments, making them on your behalf. You will pay a monthly fee for the service.


Debt Management – Credit Implications

The fact that you’re engaged in a debt management plan will be noted on your credit report. If you adhere to the regime for the entire time, your credit score should not be affected. However, at least half of clients do not successfully complete the plan. Obviously, failing to complete a debt management plan would have negative implications for your credit score.


Debt Settlement – What Is It

Debt settlement differs from debt management in that the organization you work with negotiates with your creditors on your behalf to decrease the amount you owe. Sometimes, they offer a lower lump sum payment to the creditor; sometimes, they seek debt forgiveness or lower interest. You will be expected to pay an enrollment fee as well as a monthly fee for each credit card on the plan. Also any forgiven debt is reported to the IRS who treats that as income.


Debt Settlement – Credit Implications

Debt settlement companies are not concerned with your credit report. Their job is to get the current debt lowered or forgiven. Most debt settlement companies ask you to suspend payments to your creditors while they negotiate on your behalf. This strategy has a tremendously negative impact on your credit report since the most significant factor is payment history.


Debt Consolidation – What Is It

In its most basic form, debt consolidation combines multiple debt payments into one monthly payment through obtaining either a secured or unsecured loan. That monthly payment is sometimes lower than the individual payments combined, and the interest you pay is sometimes lower as well. Sometimes you may risk losing collateral that you aren’t aware you have placed in jeopardy. That can happen when your debt consolidation loan has a cross-collateralization clause that lets the lender take other property it has financed if you default on the debt consolidation loan.


Debt Consolidation – Credit Implications

Because you are taking out an additional loan, your credit report will reflect a “hard inquiry” and that will lower your credit score. Often, your credit score decreases by a relatively small amount, and that decrease is temporary.


The ultimate debt relief, of course, is filing for bankruptcy. The general fear that filing for bankruptcy means the end of ever acquiring new credit or home ownership is unfounded. The experts at Burr Law can talk you through the different options and the various implications for your credit.

When Does Bankruptcy Clear From Your Credit Report?

If you’re considering filing for bankruptcy in Wisconsin, you probably have a lot of bankruptcy questions. It’s important for you to have all the information you need in order to make a truly sound decision, and in this post, we will look at one of the most commonly asked bankruptcy questions: When does bankruptcy clear from your credit report?

Credit reports are simply a fact of contemporary existence, and they are consulted every time you apply for a new credit card, or an automobile loan, or any type of financial undertaking. You may not be aware that in Wisconsin credit reports are also considered by landlords, and by some employers. So concern about your credit report is absolutely reasonable when making the decision to file for bankruptcy.

Filing for bankruptcy becomes part of the public record, so if anyone is truly interested in the bankruptcy filing itself, they can access that information.

Generally speaking, bankruptcy stays on your credit report in Wisconsin for about 10 years. Remember, though, that even if you don’t file bankruptcy, your creditors can obtain a judgment against you for your debt, and that judgment would appear on your credit report. A judgment can remain on your credit report for seven years or until the statute of limitations expires, whichever is longer. In Wisconsin, the statute of limitations on a judgment can be up to 20 years! So a bankruptcy may well fall off of your credit report before a particular judgment.

Bankruptcy will mean a drop in your credit score immediately after filing, but about 12 to 18 months after you receive your bankruptcy discharge your credit score should go up because your debtor to income ratio becomes much better than when you filed the bankruptcy. However, you may already have a poor credit score due to your debt-to-asset ratio (your debt is high compared to your available credit) and delinquent accounts; in that case, the decrease in your credit score may be less than you suppose. If your credit score was good before filing bankruptcy, the drop may be more pronounced.

The type of bankruptcy that you file may also affect how its presence on your credit report is viewed by prospective lenders. Chapter 7 Bankruptcy completely wipes out your debt by selling whatever eligible assets you have; Chapter 13 Bankruptcy sets up a three to five year plan to repay a portion of your debt. Obviously, prospective lenders would consider a Chapter 13 Bankruptcy in a more favorable light than a Chapter 7 Bankruptcy. When applying for credit after bankruptcy, you should be straightforward about the bankruptcy and your reasons for choosing that option.

Attorney Michael Burr and the Burr Law Offices can answer all of your bankruptcy questions. You concern about your credit report is certainly warranted, and we can help you understand all the implications of a decision to file bankruptcy. Consult the experts in Wisconsin bankruptcy law at the Burr Law Offices, and bring all your bankruptcy questions with you.

Bankruptcy Pros and Cons

When you’re in financial distress, it can sometimes seem like there is no way out. There are all different kinds of reasons people find themselves flailing in a sea of debt. Whatever the reason, when creditors are circling sharks, bankruptcy may be the lifeboat you need. Over 12,000 Wisconsinites have filed bankruptcy so far this year (January 1 through September 30, 2019). In the Eastern District of Wisconsin (including Milwaukee and its surrounding areas), 9,466 bankruptcy cases have been recorded
(www.wiwb.ucourts.gov, www.wieb.uscourts.gov). So bankruptcy is neither shameful nor unusual.

Filing for bankruptcy is a serious decision, though. You want to have all the information and understand all the implications before proceeding. Let’s take a look at some of the bankruptcy pros and cons.

PRO: Bankruptcy Stops All Collection Activities By Any And All Creditors. When your debt is crippling, it comes with collection agents working relentlessly to extract money you don’t have. Letters that threaten dire consequences, phone calls that badger you at all times of day or night, these tactics can make you feel hunted, haunted, or both. The moment you file bankruptcy, all collection activities must stop, including any garnishment, foreclosure or repossession.

PRO: Bankruptcy Eliminates or Decreases Debt. With bankruptcy, all your unsecured debt is either eliminated or reduced. Most people file Chapter 7 Bankruptcy, and with that type, you don’t need to worry about any sort of repayment. “The entire process takes from 3-6 months, after which your debt is cleared” (David Chandler, https://www.consumeraffairs.com/finance/bankruptcy_02.html). Some people choose Chapter 13 Bankruptcy, and with that type, you do repay a portion of your debts, determined with the court. This process lasts from 3 to 5 years. In both cases, your debts are cleared, once and for all.

PRO: Bankruptcy Avoids Draining Resources. The bill collectors don’t care where you get the money to pay them, and you may be tempted to take it from your retirement funds, social security or other protected assets. When you declare bankruptcy, not all your assets are liable for your debt repayment. Social security and retirement funds are protected. Filing bankruptcy allows you to retain those protected assets while getting rid of the debt.

CON: Bankruptcy Means No Credit Cards Until You Receive Your Bankruptcy Discharge. While bankruptcy rids you of your debt, it also rids you of your credit cards. Not having credit cards makes some things more difficult. For instance, car rental agencies usually require credit cards; hotels often do too. It also means that unexpected large expenses cannot be paid with a credit card; car repairs may need to wait. Once you receive your bankruptcy discharge you can apply for credit, including credit cards and you should receive that credit or credit card.

CON: Bankruptcy Complicates Credit/Loan Prospects. Bankruptcy remains on your credit record for 10 years, and it can make getting an auto loan or other kind of loan more difficult, but not impossible. And while you may receive credit card offers shortly after declaring bankruptcy, they often come with high interest rates. Naturally, your credit rating will drop, but will improve and be back to normal about 1 year after bankruptcy discharge. Professional advice can assist in charting a positive strategy and ways to improve your credit score.

CON: Bankruptcy Becomes Public Record. When you file for bankruptcy, it becomes a matter of public record, and anyone can request those records. Except it will not appear on the State of Wisconsin, CCAP website, which list case filed in Wisconsin.

A Wisconsin legal team that specializes in Chapter 7 and Chapter 13 bankruptcy proceedings can help you make the right decision for you and your family. If you need help with dealing with debt in Wisconsin, Burr Law Office can provide you with practical solutions that suit your needs. We can help you make the best possible decisions for yourself, your family and your future. Call us today at (262) 827-0375 to schedule a free bankruptcy evaluation. At Burr Law Office, we are here to help.

Dangers of Debt Settlement Companies

If you are overwhelmed by bills but are not yet ready to declare bankruptcy, debt settlement can be a viable legal solution for your financial burdens. While some private debt settlement companies may promise to wipe out your debt for just a small fee, such guarantees are unfortunately simply too good to be true. Here are just a few of the pitfalls—and fees—associated with debt settlement firms.

Poor Information

Attorneys often recommend debt settlement for individuals who are heading toward bankruptcy but who do not qualify for Chapter 7 liquidation. Because each case is specific, an attorney analyzes each client’s finances before recommending debt settlement as an alternative to Chapter 13. But the employees of private debt settlement companies work on commission, which means they make money off of each client whom they guide toward debt settlement, regardless of whether it is the best option.

Astronomical Fees

Debt settlement companies may promise a low fee, but the contracts are often intentionally confusing and even misleading. Some companies will charge you a percentage of the total debt, while others charge a percentage of the debt savings plus an initial sign-up fee and monthly service charges. Even if you manage to navigate the confusing language, debt settlement services can be so expensive that it takes clients years to pay just the fees—before they even begin to pay off their original debt.

Unresolved Debt

Once your creditors discover that you are working with a debt settlement agency, they may actually escalate your account by either sending it into collection or suing you. Unfortunately, when a creditor files a lawsuit, your debt settlement company will drop you, because only an attorney is qualified to represent you in court.

At Burr Law Office, we are committed to helping all our clients regain their financial footing. To find out how you can affordably discharge your debts through bankruptcy or satisfy your creditors through debt settlement, call our office today at (877) 891-1638 to set up a free consultation with attorney Michael Burr.

Recognizing Milwaukee Debt Collector Scams

If you fall behind on your debt obligations, you will likely receive phone calls from a debt collection agency on behalf of your creditor. In the United States, the Federal Trade Commission regulates the practices of debt collection agencies, specifically outlining what kind of behavior is acceptable. When debt collectors contact you, they are not allowed to use threatening language or seek unjustified amounts.

This ABC News report sheds light on a form of abusive and fraudulent debt collection practices ran in the United States and conducted overseas. These debt collectors use abusive language and threats to collect debt that individuals have already paid. The information in this report can help you identify whether or not a debt collection call you receive is legitimate.


If you find yourself victim to debt collector scams, contact an experience attorney right away. If you qualify, filing for bankruptcy with an attorney will put an immediate stop to such actions and help put your mind at ease. Attorney Michael Burr takes care of each case from start to finish and truly cares about the well being of his clients.

Burr Law Office can help an individual facing financial hardship gain a fresh start by providing affordable Milwaukee bankruptcy services. Learn more by calling our office today at (877) 891-1638.

What to Do If a Milwaukee Debt Collector Crosses the Line

When bills are piling up and there is no way to meet even minimum payment requirements, many debtors feel understandably overwhelmed and unsure of their legal options. But harassing and aggressive debt collection behaviors are simply not part of the bargain, no matter how much you owe. Here is what to do when a debt collector violates your rights as a consumer.

Write a Letter

If a debt collector is engaging in harassing behaviors, making false statements regarding your account, or using obscene or threatening language, that person is breaking the law. In fact, even contacting a debtor early in the morning or late at night is in violation of the federal Fair Debt Collection Practices Act. When a debt collector crosses the line, your first recourse is to write a letter to the agency requesting that collection agents cease all contact with you. While a creditor may still sue you for your unpaid debt, debt collectors are prohibited from any other further contact.

File a Report

If a collector persists in contacting you, you may want to consider filing a report with the FTC. The FTC vigorously enforces the Fair Debt Collection Practices Act and regularly takes action against debt collectors who use illegal methods to attempt to collect from consumers. If a collection agency uses any deceptive or abusive tactics, file a complaint with the FTC right away.

Contact Your Attorney

You can banish these phone calls for good by calling an attorney who has experience dealing with debt settlement and bankruptcy cases. If you are unable to pay your creditors at all, your attorney can guide you through your legal options for discharging the debt.

Did you know that filing for Milwaukee bankruptcy puts an immediate hold on all debt collection activity? If you are currently unable to pay off your creditors and your financial situation is not likely to improve, filing for Chapter 13 or Chapter 7 may be in your best interest. To speak with an experienced attorney about your options, call Burr Law Office at (877) 891-1638 today.

Violations of the Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act was passed to protect consumers from abusive, unfair, or deceptive debt collection practices. Whether you owe money on a personal credit card, an auto loan, or medical bills, debt collectors are banned from engaging in harassing behaviors in an attempt to recover funds. You can protect yourself and your friends and family members by keeping an eye out for these illegal practices.

Constant Phone Calls

Debt collectors do have a legal right to inform you of your debt—once. If you decide that you don’t want them to contact you again, you may advise the collector of your wish in writing, and the company must comply. They are also legally prohibited from calling you at inconvenient times or places, such as late at night or at work.

Contacting Family Members

Debt collectors will resort to a wide range of aggressive and embarrassing tactics in an effort to shame consumers into paying their debts. According to the Fair Debt Collection Practices Act, your debt collector may only contact a family member to obtain your contact information and cannot disclose details of your financial situation. If a collection agent has attempted to contact your loved ones or even used social media to harass you or your family, consider contacting an attorney to put an immediate stop to these tactics.

Making False Statements

Debt collectors have been charged with everything from attempting to collect unspecified extra fees to threatening jail time to impersonating attorneys or government officials. In short, they are prohibited from lying when they attempt to collect a debt, and any misrepresentation of your debts is grounds for a lawsuit.

At Burr Law Office, Milwaukee bankruptcy attorney Michael Burr is dedicated to standing up for consumers’ rights. If you are being harassed by a collection agency or creditor, Burr Law Office can put an immediate stop to these illegal tactics. Call us at  (877) 891-1638 to learn more about how our we can help.