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Although the pandemic has caused widespread economic disruption and financial hardship, to the surprise of some experts this has not been accompanied by a rise in personal bankruptcy filings. On the contrary, the Wall Street Journal reports that Chapter 7 personal bankruptcies fell 22% in 2020. The likely explanation for this unexpected drop is simple: many Americans have lost their jobs, but stimulus payments, eviction moratoriums, and student loan suspensions have eased some of the financial pressures that often prompt people to seek out bankruptcy.


Still, the Journal reports that economists expect this sort of financial relief will be only temporary for many. Future stimulus payments are unlikely and eviction moratoriums do not prevent past-due rent from piling up. Were you considering bankruptcy but these pandemic-related policies have been keeping you afloat for the past months? If you worry that bills will start coming due again and think bankruptcy might again be the right choice, please give us a call or submit a free bankruptcy evaluation.

New Means Test numbers are out for bankruptcies filed on or after 11/1/2020. All of the median income numbers are going up for Wisconsin as follows:

  • 1 person household goes up from $52,730 to $54,660;

  • 2 person household goes up from $68,363 to $72,171;

  • 3 person household goes up from $83,607 to $87,353; and

  • 4 person household goes up from $100,098 to $103,708.

  • (Add $9,000 for each household member above 4.)

These are significant increases. The last time these numbers were changed we saw an average increase of $1,356 for the households of 1 through 4. This time they average a change of $3,273.50. This will make those Debtors who were just missing out on being able to file a Chapter 7 because of Means Test issues now able to do so. For Chapter 13 Debtors it may significantly reduce the amount required to be paid on unsecured nonpriority debts in their Chapter 13 Plan. If you are considering bankruptcy, call us to find out if these new numbers will be beneficial to you.

If you are considering filing a bankruptcy, you may wonder, “Am I alone?” Certainly not. As you can see from the statistics below, in just a one year period over 90,000 Chapter 7 consumer bankruptcy cases were filed in the Upper Midwest. The following is based on bankruptcy filings from April 1, 2019 to March 31, 2020 according to statista.com and from state population figures from worldpopulationreview.com.


STATE CH. 7 FILINGS (Non-Bus.) POPULATION CASES AS % OF POPULATION

Illinois 30,107 12,659,700 .00237 Michigan 22,599 10,045,000 .00225 Indiana 14,657 6,745,350 .00217 Wisconsin 11,228 5,851,750 .00192 Iowa 4,192 3,179,850 .00132 Minnesota 7,381 5,700,670 .00129


How does Wisconsin compare to other Upper Midwest states when it comes to filing for bankruptcy? Compared to other Upper Midwest states in our vicinity, Wisconsin is in the middle of the pack for non-business Chapter 7 bankruptcy filings as a percentage of the population. The number of Debtors is actually much higher because many of the cases include two debtors when they involve a married couple filing a joint case.

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