Same Sex Couples / Joint Bankruptcy Cases

Last Friday, the U.S. Supreme Court issued its ruling in Obergeffel v. Hodges striking down the remaining bans on gay marriage in this country.
Although the question of whether couples could file a joint bankruptcy petition was arguably already settled two years ago in Windsor with the question of federal recognition and last year when the 7th Circuit affirmed Wolf, legalizing marriage in the State of Wisconsin.
But if there was any doubt still remaining on full faith & credit, that doubt is now finally erased.

What can creditors do to me if I’m on limited income?

Notwithstanding bankruptcy protections, some people – by virtue of their sources of income and the types of debts they owe – are protected from invasive debt collections.
Social security, unemployment, and other forms of (non-wage) government income cannot be garnished except by the government itself.
If you are receiving public assistance in Wisconsin (e.g. food stamps, BadgerCare, etc.), your wages cannot be garnished by creditors, nor can they be garnished for the six months after your benefits end.
Tax refunds generally can only be seized by government agencies to offset various types of government debts.

Don’t Ignore the Garnishment Answer

You’ve been sued.
At some point during the lawsuit, you receive a form that looks something like this…
But instead of filling it out and returning it, you toss it into the garbage can.
Your wages are garnished.  Thousands of dollars are withheld and used to pay your debt.
Several months later, you finally meet with a bankruptcy attorney.  You tell your attorney that you’ve been receiving public assistance in the form of food stamps.  You’re dismayed to find out that your wages were exempt from garnishment and that you would not have lost all that money if only you had filled out the financial disclosure form.
DON’T THROW THESE THINGS AWAY.  Sticking your head in the sand and hoping your problems will go away on their own will only make problems worse.
Seek professional guidance.  Call today.


The U.S. Supreme Court handed down another bankruptcy ruling this term.  This time confirming what has largely been undisputed in this district – that a wholly unsecured second mortgage cannot be stripped off in Chapter 7.  The decision came down in Bank of America v. Caulkett.  Parts of the decision are very reminiscent of the reasoning laid out in the Ryan decision, though that one applied to Chapter 13 cases.

Three Announcements

Beth Ermatinger Hanan has recently been appointed to serve as judge for the U.S. Bankruptcy Court for the Eastern District of Wisconsin.  She joins our existing panel of judges of Susan V. Kelley (who was promoted to chief judge when former chief judge Pamela Pepper was appointed to the district court last fall), Margaret D. McGarity, and G. Michael Halfenger.
Bankruptcy debtors may now choose to receive certain notices from the bankruptcy court by e-mail instead of postal mail.  This service will not include all notices, as anything filed by trustees or creditors will still have to be sent via conventional methods.  But it can prove to be a time-saver for some who would prefer electronic messaging.  The system is called DEBN (Debtor Electronic Bankruptcy Noticing).  You can get additional information and register for the service by visiting  If you have further questions, contact the Clerk’s office at (414) 297-3291.
Finally, some changes to the Mortgage Modification Mediation Program.  This from Judge Kelley:

Effective July 1, 2015, we are making changes to the Court’s Mortgage Modification Mediation (MMM) Program.  The new program will require debtors to use the “documods” program ($40) to prepare the required loan modification package PRIOR to filing the Motion to participate in the program.  After preparing the documods documents, the debtor will file the Motion to participate, and the lender will have 14 days to object.  If no objection is filed, the MMM Order will be entered, the mediator will be appointed, and the process will continue as under the existing program.
If a lender timely objects to the Motion, the Court will hold a hearing, at which the lender can explain why it does not wish to participate in the program.  The Judges have agreed to urge lenders to try the program, rather than object because they prefer to use their own loss mitigation programs.
The new form of Motion and Order is on our website:, and I urge you to review the new documents and contact Sean McDermott with any questions or comments you may have.  These documents have been reviewed and revised by our “MMM Committee” but we are certainly open to suggestions and comments from the bankruptcy bar.

Susan Kelley