A piece in the Washington Times notes that when Congress overhauled the bankruptcy code in 2005 (revisions that changed the bankruptcy laws in Wisconsin and everywhere else), it intended to steer more consumers towards a Chapter 13 bankruptcy repayment plan. However, things didn’t pan out as anticipated because the explosion of long-term unemployment forced more consumers without regular income into Chapter 7 as their only alternative. “Overburdened by huge mortgages, plunging home values, unsustainable credit card debts, tightening credit conditions and soaring joblessness, families have been carrying an ‘overhang of consumer debt’ for a decade or so as a result of a low savings rates and over consumption,” the Times article explains. This resulted in a “debt bubble” and soaring bankruptcy filings, according to the Times. The decrease in home values has particularly created a Catch-22 for many consumers who are now unable to even qualify for a home equity loan as a temporary bill-paying measure, assuming for the sake of discussion that would be a wise thing to do: “The ability to tap into home equity to bridge difficult times is no longer available,’ [an official with the American Bankruptcy Institute] said, because home prices have plunged since the housing bubble began to deflate in 2006.”
There’s an old saying, you can’t borrow your way to prosperity. And the collapse in real estate values, plus job layoffs and maxed-out credit cards, affects honest consumers from all brackets: working class, middle class, and upper income. Unfortunately, many consumers in this state may now have little choice but to consider an individual bankruptcy in Wisconsin. If you’re facing the double whammy of the debt and housing bubbles that might be about to burst, contact a debt consolidation attorney about debt relief in Wisconsin. A trusted legal adviser is where to go for Wisconsin bankruptcy information.
