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Bankruptcy and Debt Consolidation in Wisconsin

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Bankruptcy can have long-term effects on the financial prospects of individuals and families in our area. In many cases, working with a knowledgeable law firm to negotiate debt consolidation in Wisconsin can allow consumers to manage their debts more effectively.

Debt is a huge problem in our country. According to credit bureau Experian, consumer debt soared to $13 trillion in the last quarter of 2018. This represents a serious burden on residents of Wisconsin as well as those throughout the United States. While the Milwaukee Journal Sentinel reported in January 2019 that bankruptcy filings declined for the eighth consecutive year in 2018, farm bankruptcies are on the rise. About 49 farm families filed for bankruptcy in Wisconsin in 2018. That figure is more than double the number of farm bankruptcies in 2009. This increase in bankruptcies corresponds with a recent U.S. Department of Agriculture report that U.S. farm debt amounted to more than $309 million in 2018.

The Basics of Bankruptcy

All bankruptcy cases must be filed in federal courts and are governed by the U.S. Bankruptcy Code. Depending on where you live in Wisconsin, these cases go through the U.S. Bankruptcy Court of the Eastern District or the Western District of Wisconsin. Individuals can file for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy allows for the discharge of debts while paying creditors through the sale of assets held by the debtor. For those who have some ability to repay their creditors, Chapter 13 allows the retention of most property while allowing more time to make payments.

Recent Changes to Federal Law

One case that established an important precedent for future bankruptcy cases was Lamar, Archer & Cofrin, LLP v. Appling, which was decided by the U.S. Supreme Court on June 4, 2018. The high court found that a false statement by a debtor about a single asset could make a debt nondischargeable. This is only true, however, if the false statement was made in writing.

Rule 3002(a) of the U.S. Bankruptcy Code was amended in 2017 to require secured creditors to file a proof of claim with the court before their claims can be allowed. A recent adjustment to Rule 3015 makes the determination of the amount and the priority of secured debts a binding determination. Finally, means testing will be used to determine whether debtors are eligible to file for Chapter 7 bankruptcy or whether they will be required to file for Chapter 13 bankruptcy plans instead.

Avoiding Bankruptcy

A Wisconsin legal team that specializes in Chapter 7 and Chapter 13 bankruptcy proceedings and debt consolidation can act as a partner in managing debts and reaching settlements with creditors. This can reduce the need for bankruptcy in some cases.

If you need help with managing debt consolidation in Wisconsin, Burr Law Office can provide you with practical solutions that suit your needs. We can negotiate with bill collectors and creditors to help you even the playing field and to achieve the best results for your situation. 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.

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How Will Your Divorce (and Your Ex’s Debt) Affect Your Future?

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Getting divorced in Wisconsin means accepting a lot of significant changes. Most people understand this and look forward to making lifestyle transitions, such as starting new relationships, pursuing career advancement and escaping abusive situations. Sadly, few are prepared for how their divorces might impact their debts.

What will happen to your debts after you split? Can seeking bankruptcy protection help you manage your obligations more effectively? Keep reading for the essential facts on shared liabilities, bankruptcy and divorce debt consolidation.

Divorce and Debt

When people get divorced, they naturally consider their assets. They also need to think about their liabilities because they may be held responsible for their spouses’ actions even after parting ways.

Key Marriage Debt Concepts in Wisconsin

The notion of community property, or assets acquired during a marriage and deemed to belong to both spouses equally, also applies to certain debts. Important concepts to understand include

  • The doctrine of necessaries, a law permitting creditors to collect certain kinds of debts from an indebted person’s spouse, and
  • The determination date, or the earliest date that falls after when you got married and both took up in-state residency.

Why Your Determination Date Matters

When judging debt matters, courts may take distinct approaches depending on when specific debts were incurred relative to the determination date. For instance, pre-determination-date obligations frequently result in creditors collecting separate property from an indebted spouse. They can also take marital property that would have belonged solely to one spouse if they’d never tied the knot.

Normal creditors can’t collect community property to resolve pre-determination-date debts. The IRS has no such limitations, however, so tread carefully.

What about creditor claims that you acquired after getting married and moving to Wisconsin with your spouse? These liabilities may include debts that you took on in your family’s interest as well as those you incurred for personal reasons:

  • When debts relate to family purposes, creditors can collect from the indebted spouse’s separate property and any marital property they share.
  • With non-family purpose debts, creditors can take a debtor’s personal property as well as half of their marital assets.

Exploring Your Divorce Debt Consolidation Options

Getting divorced is all about moving on with your life, but dealing with your ex’s debt can make cutting the tether much harder. Although some couples avoid issues by entering into matrimonial property agreements before getting married, this option only works in certain situations. You also have to supply creditors with a copy of your agreement in advance for it to have any impact.

Unfortunately, Wisconsin’s complex communal property laws catch many couples off guard. For instance, imagine that your spouse didn’t tell you that they took out a loan during your marriage. You might find yourself liable for a significant debt without even knowing it existed. These unpleasant surprises make it extremely difficult to get a fresh start.

Pursuing divorce debt consolidation through bankruptcy may be an option. Since the system doesn’t give people preferential treatment just because their spouses got them in over their heads, bankruptcy may be a viable backup plan. By halting collections and giving you time to figure things out, bankruptcy can help you take the unexpected consequences of getting divorced in stride.

Call the Burr Law Office at (262) 827-0375 to find out how to unshackle yourself from the burden of debt due to a divorce.