Attorney Shannon Wynn: Wisconsin bankruptcy filings decline… so what

The news we heard at Wynn at Law, LLC in February reported that Wisconsin bankruptcy filings last year were at their lowest level since 2007, before the recession. What does that mean to you? Absolutely nothing. Economists care about the number because it means more people are working (maybe) and more people are paying what they owe (probably).

It could also mean that more people in debt sought relief immediately after the mortgage crisis rather than waiting and struggling. There's no shame in that. And there's no shame in waiting until now to file if you've struggled trying to get caught up. About the only thing that fewer filings in 2016 means to you and me is that the bankruptcy judge may have a little less of a backlog of cases. Maybe.

On that note, one of the first questions I get is, 'How long will the filing take?' A lot less time than it took to get into debt, for sure. And a lot less time than it takes to continue to paddle upstream against interest rates, penalties, and harassing phone calls. Depending upon the shape your financial records are in, the process is around four to six months. That's the filing process to get a ruling. If you have a Chapter 13 bankruptcy, you're still involved with payment plans approved by the court for the following 36 to 60 months.

Before Wynn at Law, LLC files your Chapter 7 or Chapter 13 bankruptcy, however, most clients are required to go through pre-bankruptcy credit counseling and get a certificate. I'll have more about this in next week's article. Once we have that and file with the court, the Automatic Stay gives you an immediate break. Take a look at my earlier article on Automatic Stay.

There are several other milestones along the process including the creditor meeting I mentioned last week. Following the creditor meeting, there's a 60-day window for the creditors to possibly challenge discharging your debt. So, from filing to the end of that 60-days, the average case in southeast Wisconsin will take four to six months. Or maybe a little less in light of the recent news.

  

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

Photo: Vladek, used with permission.

Attorney Shannon Wynn: Demystify the creditor meeting in two steps

Some of our Wynn at Law, LLC bankruptcy filing clients have such tremendous anxiety over the Section 341 meeting of creditors. They’ll imagine intimidation like in the photo. For some, it’s the hang up that keeps them from filing. For others, it’s the cause of more than a few sleepless nights. I put a lot of value in the statement that 90 percent of what you worry about never comes true. The creditor meeting falls into that category.

This meeting isn’t a hearing. It’s not even in a courtroom. You’re under oath of course. However, there isn’t a judge. Here’s the two-step for taking the terror out of the topic:

First, it’s required. There isn’t a way out of it, so you go through it in order to clear the path for your financial future.

Second, most of your creditors won’t show up at all! They’re all invited by law. In reality, they know you’re represented by competent counsel and it’s usually financially unrealistic for the creditor to spend the time and staff hours to come to your hearing. The ones who do show up may just want to know about recent cash advances or revolving credit charges to find out if you were on a spree you had no intention of paying back. Or the lender on secured property (a car or house) might show to find out if you’re reaffirming the loan or giving back the property. We’ll have already talked this through in our office. No worries.

In a previous post, I mentioned the value of honesty. If you’ve accidentally missed something, Wynn at Law, LLC can amend the filing before the meeting. Your creditors won’t think your hiding something if you aren’t hiding anything. Again, no worries.  If they do show, and they do ask questions, commonly they’ll want to know things we’ve already covered in advance. For example, if you’re getting an income tax refund or if anyone owes you money or holds property that belongs to you or if you’ve recently transferred property. None of this is an ambush because you’ve already covered it with Wynn at Law, LLC.

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

Photo: SIPhotography, used with permission.

Attorney Shannon Wynn: Automatic Stay is a bankruptcy lawyer telling creditors to ‘back off’

One bit of peace of mind my bankruptcy clients welcome as much as a fresh financial start is the Automatic Stay.  Immediately upon Wynn at Law’s filing of your bankruptcy, creditors generally cannot continue the collection process. It’s quiet time at dinner time since the persistent calls usually come to a screeching halt. When you file, Attorney Shannon Wynn becomes the contact person for the creditor.

The stay halts all attempts by creditors to collect your debts, including existing wage garnishments, lawsuits, and car repossessions. And of course the calls and letters.

Not all debts are subject to this provision. For example, child support orders and arrears are not stayed and the state can continue to attempt collection. Also, if a creditor believes he or she has sufficient grounds to continue, the creditor may petition the court to lift the Automatic Stay.  Rare, but it happens.

It isn’t to imply they won’t get a share of your assets. Their share is a proportion. To simplify it, let’s say one third of your debt is owed one creditor: Then one third of your assets are owed them. Not more if they keep after you with more letters and calls. Once the automatic stay is in effect, that creditor is likely to receive less than the full amount they are owed if anything at all. Plus, creditors know you can file suit against THEM if they continue to try to collect after a bankruptcy filing. That, too, is rare, but it happens.

When isn’t there an Automatic Stay?  If you’ve had Wynn at Law, LLC or another firm file a bankruptcy for you in the prior year, you may not get the Automatic Stay. With residential leases, a landlord can continue an eviction if they already obtained a judgment. Even after the bankruptcy filing, a landlord could start an eviction if he or she can demonstrate that the home/condo/apartment is being damaged.

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

Photo: Sonar. Used with permission.