We’ve written a series of blog posts answering common questions regarding bankruptcy and the legal process. Call (262) 827-0375 for a FREE consultation

Exploring the Relationship Between Bankruptcy Reform, Recession, and Bankruptcy Filing Rates

Four years ago, the United States was hit with the largest recession since the Great Depression. Today, many economic analysts are still scratching their heads, desperately trying to uncover all of the contributing factors. In addition to dishonest lending practices and a lack of regulation on Wall Street, some have said that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 must share some of the blame. Here’s a brief look at how bankruptcy reform affected the recession and total bankruptcy filing rates:

2005 Bankruptcy Reform

Before 2005, creditors complained that too many people were escaping their debts by filing. At that time, people of all income levels could liquidate their debts by filing for Chapter 7. That’s why the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) added provisions that made it more difficult for debtors to file for Chapter 7 – provisions that included a higher filing cost and fewer dischargeable debts.

Global financial crisis

In the years following BAPCPA, consumers could no longer rely on bankruptcy in the same way. Instead, many people took money out of their home equity to pay off outstanding debts. Once the equity ran out, many homeowners faced foreclosure—in fact, one study found that mortgage defaults increased by 14% each year after the reform passed. This in turn led to a housing market collapse that further fueled the recession.

Number of filings

Once the recession hit, millions of people lost their jobs and were forced to file for bankruptcy. Even though the 2005 reform supposedly made it more difficult to file for bankruptcy, the number of filings went up from around 150,000 in the third quarter of 2006 to nearly 400,000 in the same quarter of 2009.

If you have any questions about bankruptcy reform and how it affects you, contact Burr Law Office. Milwaukee bankruptcy attorney Michael Burr is always up to date on the latest changes and will use his knowledge to help you get through your tough financial times. Call our office to at (877) 891-1638 to get started.

Important Rights You Are Entitled to Under the Fair Debt Collection Practices Act

No one ever wants to receive a call from a debt collector. Collectors are notorious for being unrelenting and sometimes using less-than-reputable practices. Fortunately, the Fair Debt Collection Practices Act is meant to protect consumers from deceptive and abusive practices. Continue reading to learn about important rights to which you are entitled under the Act.

Right to be Free from Harassment

Debt collectors are prohibited from harassing you and making false statements. This includes everything from misrepresenting the amount you owe and falsely claiming that you have committed a crime to using threats of violence or harm and using profane language.

Right to Private Time

The Act prohibits debt collectors from calling you before 8 a.m. or after 9 p.m., unless you agree otherwise. You can also stop debt collectors from contacting you by informing them in writing that you do not want them to contact you.

Right to Avoid Contact

The debt collector must contact your attorney rather than contacting you if the collector is aware of the fact that you are represented by legal counsel.

Right to Seek Recourse

Some debt collectors will push boundaries and violate the law that is meant to protect you. If this happens, you can sue the debt collector in state or federal court. You may be entitled to compensation for any damages you suffered due to the illegal collection practices. However, you only have one year from the date of the violation to file such a claim, so contact a debt relief attorney today if a creditor has violated the law.

At the Burr Law Office, we focus on providing affordable Milwaukee bankruptcy and debt relief services. We understand how stressful financial difficulties can be, and we will work with you to help relieve your stress and give you hope. To schedule a consultation, call our Milwaukee bankruptcy law office at (877) 891-1638.

Inside the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made several significant changes in bankruptcy law. The legislation most directly affects American consumers by outlining a “means test” to determine eligibility for debtors who wish to file for bankruptcy. If you are considering filing for Milwaukee Chapter 13 or Chapter 7 bankruptcy, here is how the law may affect you:

The Means Test

The new means test determines whether a consumer is eligible for Chapter 7—liquidation of the debtor’s assets—or is obligated to file a Chapter 13 plan for repayment. In short, this test gauges an individual’s monthly income to determine his or her “means.” Many Americans mistakenly believe that this new law will make them ineligible to declare Chapter 7 bankruptcy, but the truth is that each case is completely unique, and only an attorney with experience in bankruptcy law can help you determine how you should file.

Specific Calculations

In order to calculate means, an applicant must list all sources of his or her current monthly income, or CMI, in the six months prior to when the case was filed. In other words, the income test ignores the debtor’s current and anticipated future income. The CMI is then compared to the median income reported for individuals living in the debtor’s state with the same number of dependents. If the six-month CMI is higher than the median income, it is presumed that filing under Chapter 7 for debt relief would be an abuse of bankruptcy law.

Possible Rebuttals

A debtor can rebut an initial presumption of abuse if he is able to reduce his CMI by subtracting certain “allowed expenses.” A debtor may also subtract “other necessary expenses” and “additional expenses” to further reduce his CMI according to his state’s standards.

Burr Law Office has been providing quality, affordable bankruptcy legal services to Wisconsin clients for nearly 20 years. Visit us online or call (877) 891-1638 to hear why our satisfied clients consistently rank us as one of the best law firms in Milwaukee.

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.

Milwaukee Legal Aid: Creating a Monthly Budget

Making a monthly budget is the first essential task for any consumer after applying for debt reorganization or declaring bankruptcy. After your attorney has helped you eliminate your debts, your first goal should be to get back on track financially. To make a monthly budget that works for your needs and lifestyle, follow these simple guidelines.

Identify Your Expenses

The primary task in making any budget is simply to compare your income to your expenses. First, identify how you are currently spending money, and set goals that take into account your long-term financial objectives. To track your spending and make sure you stay within our budget, consider investing in a financial software program like Quicken or Microsoft Money.

Watch Your Cash

If you are like most people, keeping track of how much cash you spend can be a difficult task. But the first step to getting your finances on track is sticking to your budget, and it is nearly impossible to follow your financial plan when you forget to record daily cash expenditures, from dry cleaning to morning coffees to paying parking meters. Whenever possible, use a debit card instead of hitting the ATM to avoid cash leakage.

Analyze the Details

While it is not necessary to spend hours each day creating new lists and categories, it is important to watch out for what financial experts call spending creep. As your income begins to naturally increase due to promotions or investment payoffs, remember not to adjust your spending accordingly without taking a look at your original budget first. Chances are, other expenses like rent payments have also gone up.

If you have suddenly found yourself buried under a mountain of debt, you probably know firsthand just how exhausting creditor harassment can be. An attorney can put an immediate stop to foreclosure, stop repossessions, and end harassing phone calls. If you are in need of Milwaukee lgal aid, contact Burr Law Office at (877) 891-1638 to schedule a free consultation.

Legal Aid Milwaukee: Rebuilding Credit

After a bankruptcy filing, the question of rebuilding credit scores is often raised. Just as your bankruptcy filing and proceedings take time, so does rebuilding your credit. There are a lot of things to keep track of during the process, so legal aid Milwaukee from Burr Law Office can help. The number one rule for rebuilding your credit is to know your score and the things that will change it.

Acquire and review credit reports

As mentioned above, before you can do anything to fix your credit score you’ll need to know where you can go. Attorney Michael Burr will not only help with your bankruptcy filing, but will also help you review your credit report as well. By breaking down your score, you will have a better idea of what you can do to fix it.

Open credit/loans with caution

Many people do not keep a major credit card open during bankruptcy. If that’s the case for you, it’s a good idea to open one once your bankruptcy has been discharged and pay it off monthly in full. Also, a few years down the road, it may be worth considering getting a line of credit – maybe a car loan or something similar – that you can pay off successfully. Be sure to shop around for interest rates and know that the higher your credit score the better interest rate you’ll get.

Be timely with bill pay

Most people don’t understand the influence timely bill pay has on your credit score. To make it simple, paying your bills on time is a must. There are a number of services that allow for automatic bill pay nowadays. If you’d rather not do automatic bill pay, set reminders in your electronic calendar.

If you’re having troubles rebuilding credit after your bankruptcy, call Burr Law Offices to speak with attorney Michael Burr and get the legal aid Milwaukee you need. He’ll help you get your credit back on track.

Bankruptcy Court: Inheritances

Milwaukee bankruptcy inheritanceIt’s not uncommon for people to receive inheritance money when a loved on passes away. For those that have filed or are considering filing for bankruptcy, the question of “what will happen to that money?” will generally come up. This situation will affect the way the Milwaukee bankruptcy court views your case. Attorney Michael Burr is here to help you find the optimal solution to these types of questions. Here are a couple general circumstances to consider when it comes to inheritance dollars.

Whether Chapter 7 or Chapter 13, inheritance money received during your bankruptcy will generally be considered an asset. Assets can be protected in some cases but will often become part of the bankruptcy estate in some way or another.

Chapter 13

When you file for Milwaukee Chapter 13, your property is not liquidated as in a Chapter 7. In return, however, you’re required to pay back your debts through a repayment plan. Inheritance money is considered an asset, so trustees will generally want you to pay more to your unsecured creditors. In other words, inheritance money can increase the amount of your monthly plan payment.

The 180 Day Guideline

For Milwaukee Chapter 7 cases, any inheritance money you acquire within the first 180 days after filing would be considered property of the bankruptcy estate. This means the nonexempt portion of the money you receive would be taken by your trustee and distributed to any unsecured creditors.

In Chapter 13, you generally get to keep your assets. However in these cases you would still be required to pay. A general rule of thumb is that you’ll be required to pay at least the nonexempt portion of the inheritance.

If you receive inheritance money after the 180 day period in a Chapter 13, most trustees will argue that you should be required to pay it into your plan.

If you’re thinking about filing for bankruptcy and have received or will be receiving an inheritance, contact the experts at Burr Law Office. We’ll help you figure out what the best steps are and how to work with the Milwaukee bankruptcy court to settle your case.

How an Experienced Lawyer Can Help You

We all experience difficulties when it comes to money. Job loss, illness, injuries, unexpected expenses – there are a number of factors that contribute to financial stress and hardship. If bankruptcy is an option for you, it’s a good idea to consider hiring an experienced Milwaukee bankruptcy lawyer to help you with your case. By working with a lawyer like Michael Burr, you will reduce the amount of stress and heartache that can sometimes go along with filing.

A Chapter 13 filings tend to be quite complicated due to the number of parts that are associated. These parts include:

  • Setting up a repayment plan
  • Reporting assets and determine what, if anything, can be kept
  • Stopping foreclosures and repossessions
  • Stopping creditor harassment

These processes can become quite complicated for the average person. There are a number of variables that, without prior knowledge of the bankruptcy process, can be difficult to manage. So much so that, depending on the situation, a Chapter 13 case filed without an attorney is in danger of being immediately dismissed.

When it comes down to it, a poorly filed bankruptcy petition can do you more harm than good, especially in the long term. Working with an experienced Milwaukee bankruptcy attorney like Michael Burr will help ensure you are getting the most out of your petition.

If you’d like to learn more about the Chapter 13 process and filing with Burr Law Office, call us at 262-827-0375 to schedule a free consultation. We will work around your schedule, including evenings and weekends.

Legal Aid Milwaukee: Are You Hurting Your Credit?

Maintaining healthy credit takes persistence and dedication. Financial freedom is something that many people strive for, but there may be things you’re doing that are causing you to take a step back from achieving said goal. For the best financial legal aid Milwaukee has to offer, look to Burr Law Office. Here are a few things mistakes people often make that can damage their credit.

Applying for cards when you don’t need them

Retail store and gas credit cards often seem very appealing. Free merchandise, added discounts, and other benefits may be great, but you could be hurting your credit score if you open too many. What most people don’t think about is the astronomically high interest rate most of these cards possess. Credit card offers you receive in the mail can also seem like a great deal, and some are. The important thing to remember is that you should open cards just to have those perks. It’s good practice to only apply for credit when you need it.

Cosigning on loans

When it comes to family, saying “no” can be one of the hardest things to do. When you cosign a loan, be it for a car, business, or any other purpose, your credit rating will be affected if there are any issues. Only agree to cosigning if you trust the person will be responsible with the loan. You don’t want to jeopardize your relationship over something like a loan.

Charging major expenses

One of the biggest mistakes people make is charging huge expenses to their credit cards without having the means to pay them back. Vacations, jewelry, cars…you name it. These types of expenses should only be charged to a credit card if you have the means to immediately pay them off. Just because you’ll get miles or rewards doesn’t mean you should risk your credit.

For more legal aid Milwaukee, contact Burr Law Office. Our experts will help keep you financially safe and secure.

What To Look For In An Attorney

When you make the decision to file for bankruptcy, an important next step is figuring out who to trust to guide you through the process.There are a lot of attorneys who claim to offer bankruptcy services, but your best choice is someone that specializes specifically in bankruptcy law. Here are a few things our Waukesha bankruptcy experts recommend you consider as you make your decision.

Avoid the cheapest…and most expensive

When you’re stuck in a financially difficult situation, the last thing you want to do is spend money to fix it. There are a couple different structures for payment, including hourly rates and flat fees. When you look into payment, don’t jump for the cheapest option right off the bat. The old saying “you get what you pay for” rings true, and you may find yourself wasting money on something that doesn’t help. On the other hand, some attorneys that charge per hour for their time may drag things out in attempts to get more money.

Legal know-how

The law industry as a whole is quite broad. There’s divorce law, real estate law, corporate law, etc. In a technical sense, any lawyer can help you file for bankruptcy. Your best bet is to go with someone that has a thorough understanding and experience with bankruptcy law.

Avoid scams

Some companies may offer “quick debt relief” services, promising to rid you of your debt with a snap of your fingers. Sadly, these companies take advantage of people all too often by charging insanely high rates without doing proper work.

Our bankruptcy experts are here to help guide you through this difficult time. Call Burr Law Office at 262-827-0375 to schedule a complimentary consultation. We’ll show you why we’re the right choice for your filing.