Considering filing for bankruptcy during the coronavirus pandemic? Read this first

Posted at 6:10 AM, Jun 08, 2020
and last updated 2020-06-08 19:43:56-04

MILWAUKEE -- — The economic pain COVID-19 has caused in Wisconsin is undeniable.

Since March 15, more than 620,000 people have filed for unemployment, compared to about 50,000 around the same time last year.

If your claim is still pending and you're drowning in debt, filing for bankruptcy looks like the ticket out.

"A lot of people have bills coming in and no way to pay them, however, we are encouraging people to wait," said Karen Bauer, an attorney with Legal Aid Society of Milwaukee.

"If you file a bankruptcy today and two weeks from now you break your leg and have to go to the hospital, there's nothing we can do about that new debt," Bauer explained.

Bauer explains a bankruptcy resets your finances for that moment in time, so if you're still accumulating debt, that won't get wiped out.

Instead, she urges people to work with creditors.

"You can tell them look I'm on unemployment because of COVID-19, what programs do you have in place to help me?

"A lot of creditors have programs, especially big banks or credit cards, or auto lenders," she continued.

She says there are cases where bankruptcy becomes necessary like if you have a lawsuit pending.

Bauer also suggests asking yourself, 'What will happen if I don't file for bankruptcy right now? If the answer to that is 'Not much,' she says, you don't need to file.

If you want to talk your case over with an attorney, you can contact the Legal Aid Society of Milwaukee at (414) 727-5300.

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