Wisconsin’s Foreclosure Redemption Period Cut in Half?

IMPORTANT NEWS FOR HOMEOWNERS AT RISK OF FORECLOSURE
Under existing Wisconsin law, residential properties in foreclosure typically get a 6 month redemption period (and 12 months if the mortgage lender is seeking a deficiency balance).  The redemption period is the time after a court has entered a judgment of foreclosure during which a homeowner can take steps to save his or her home before it is auctioned off.
There has been buzz since last November that legislation was being drafted to slash those periods in half.  That means that instead of 6 months where no deficiency is sought, a homeowner will only have 3 months to act.  If a deficiency is sought, a homeowner would have 6 months instead of 12.
2015 AB 720 was formally introduced on January 15, 2016.  It’s sister bill, 2015 SB 629 was introduced on January 22, 2016.  This is PENDING LEGISLATION.  It is not law yet.  I will be tracking both of these bills very closely and alerting you to updates as I become aware of them.
The shorter redemption period is a double-edged sword.  On the one hand, it does shorten the time a homeowner has to save their home.  On the other hand, if a homeowner chooses not to save their home, it shortens the period that the homeowner is burdened with the responsibilities of owning the home, such as insurance and winterization.
The bill also prevents abandoned homes from lingering without a Sheriff’s Sale.  After a foreclosure judgment is entered, the property must be sold within 12 months or the mortgage lien must be released and the judgment vacated.  However, the bill does not require a mortgage lender to file a foreclosure action after a specified period of delinquency, so so-called zombie mortgages will continue to exist.
For the record, the lobby behind this legislation is the Wisconsin Bankers Association.  The bills have been sponsored/co-sponsored by:

Sen. Frank Lasee (Republican – De Pere)
Sen. Duey Stroebel (Republican – Saukville)
Rep. Terry Katsma (Republican – Oostburg)
Rep. Scott Allen (Republican – Waukesha)
Rep. David Craig (Republican – Big Bend)
Rep. Bob Gannon (Republican – Slinger)
Rep. Adam Jarchow (Republican – Balsam Lake)
Rep. Jesse Kremer (Republican – Kewauskum)
Rep. John Macco (Republican – Ledgeview)

If these bills pass and become law, it means that homeowners will no longer be able to drag their heels if they hope to save their homes from foreclosure.  If you’re at risk of foreclosure, find out how Chapter 13 bankruptcy can help save your home.  Contact me today.

Utility Reminder

Wisconsin’s winter moratorium laws prohibit your utilities from being shut-off, even if you are delinquent on your utility bill, until April 15, 2016.
Case law from 2012 has made it such that a Chapter 128 filing is no longer a guarantee of staying a utility disconnection.  Although Wisconsin Public Service has continued to honor the Chapter 128 stay, the only guaranteed way of preventing a disconnection (aside from catching up on the past-due amounts you owe) is to file bankruptcy.
Bankruptcy cases take a while to prepare properly.  If you are struggling with your utility bills this winter, consult with an attorney now.  Don’t wait until April to explore your options.

2015 Tax Returns

This is a yearly reminder that Chapter 13 cases filed after December 31, 2015 cannot be confirmed until the debtors’ 2015 tax returns are filed with the appropriate taxing authorities, even though they are not due to the taxing authorities until April 15, 2016.

Although a bankruptcy case can be filed without the tax returns (only confirmation of the plan is held up), it is STRONGLY advised that the tax returns be filed before your case is filed, because there often is information on the tax returns that are relevant to your schedules, Means Test, and even the calculation of your plan payment.

If you need to file a Chapter 13 bankruptcy soon, file your tax returns as soon as possible.

If you have already file a Chapter 13 bankruptcy and your case is still pending, remember that you must send a copy of your 2015 tax returns to your attorney so they can be forwarded to the Trustee.  If you are required to submit one-half of your tax refunds to the Trustee, you must do so immediately upon receipt of your refunds.  If you are unsure of whether you are required to submit tax refunds, call your attorney or consult your copy of the Chapter 13 Plan.

2015 Foreclosure Statistics

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Total
Brown 41 50 50 26 32 31 35 38 37 34 31 27 432
Calumet 5 5 3 8 9 6 2 6 5 4 8 10 71
Door 5 8 3 2 6 4 1 5 3 6 7 6 56
Florence 0 0 0 1 0 1 1 1 2 0 0 0 6
Forest 4 3 0 2 0 0 2 5 3 1 0 2 22
Kewaunee 4 5 4 1 6 2 5 4 4 3 2 1 41
Langlade 4 4 5 7 7 4 3 3 6 6 6 3 58
Manitowoc 11 11 15 11 12 11 18 15 18 18 10 10 160
Marinette 10 8 7 11 10 9 7 4 5 6 4 12 93
Menominee 0 2 2 0 0 0 1 0 1 0 0 0 6
Oconto 7 7 6 6 6 7 7 6 11 3 10 3 79
Outagamie 29 26 23 18 20 30 19 20 23 21 28 24 281
Shawano 4 9 10 8 6 4 2 4 6 4 4 3 64
Waupaca 9 8 12 7 11 11 9 9 13 10 8 6 113
Waushara 7 7 8 3 6 4 6 8 7 6 4 5 71
Winnebago 35 27 30 25 24 25 25 27 24 29 26 26 323
NEWI Total 175 180 178 136 155 149 143 155 168 151 148 138 1876
STATE Total 1085 1049 1112 941 892 860 903 848 1025 962 893 834