Bankruptcy & CCAP

Many people avoid filing for bankruptcy based on the fear that if they do, everyone will find out about it.  Many of them believe that if they file bankruptcy, it will be listed on Wisconsin’s Circuit Court Access (aka CCAP).  This is not the case because CCAP is a portal for state court cases.  Bankruptcy is a matter of federal law.
There is an analogous website to CCAP that does show bankruptcy cases.  This is known as PACER.  Unlike CCAP, which is free and open to the public, PACER requires registration and a paid account, and is primarily used only by legal and financial professionals.
Recently, I had a client call in because she was disappointed to discover that it was not listed on CCAP.  Presumably she was hoping to access information about her bankruptcy case quickly and easily.
So, whether you want it listed on CCAP or are petrified that it will be – the answer is the same.  Federal bankruptcy cases do not show up as cases on CCAP.

Humiliation and Unwarranted Social Stigmas

Today’s blog entry is a little different.  Although the topic has quite a bit of overlap with bankruptcy, it is not a bankruptcy article per se, but instead speaks to a much broader issue.
I can’t begin to tell you how many times one of my bankruptcy clients has admitted to me that they put off filing for bankruptcy for years because of intense pressure to avoid bankruptcy – usually from family or friends.  It’s safe to assume that for every person who finally has the courage to declare bankruptcy, there are undoubtedly many more people who refuse to get the assistance that they need out of a misplaced sense of pride.
There are many different ways in which societal norms can have detrimental effects on individuals, because they are discouraged from getting help because of the stigma attached to it.  Of course, this isn’t a new revelation to me, or (I imagine) anyone else reading this article.
Recently, I’ve had the privilege to begin volunteering with a youth suicide prevention organization.  My involvement with this group has opened my eyes to just how broad and deep some of these social stigmas go – and how many of them we take for granted without thinking of them, without questioning their value, and without challenging their validity.
It is possible to cause someone great psychological harm without intending to do so, and even without overtly insulting remarks.  For instance, many educators and parents discourage the use of the word “retard”, even when used in jest.  LGBT youth can feel marginalized by phrases like “that’s so gay” or even assumptions that they should be dating someone of the opposite gender.  Many people in need of counseling for mental health are discouraged from doing so because of the connotation that people who visit psychiatrists are “crazy”.  And of course, people are steered away from bankruptcy based on the idea that “if you incur a debt, you’re responsible for paying it”.
Of course, I don’t intend to suggest that people should incur debt without any intention of paying it back.  However, most people who are insolvent are that way due to mistakes or even events that are out of their control.  Isn’t the state of insolvency punishment enough?  Should people really be forced into poverty for the rest of their life to repay debts that they’ll never get caught up on?
What right does anyone have to sit in judgment of someone else?  To assume that just because they have enough money to pay their bills, that everyone else must have enough money to pay their bills?  To assume that just because they’re enjoying a happy and healthy point in their life, that people with problems shouldn’t seek out a counselor?
Most people cannot fully appreciate just how much power certain words, phrases, and assumptions can have on other people.  Even the most innocuous and benign words can have a major impact.
We live in a society that treats mental illness as somehow less important than physical illness or injury.  We teach kids a silly rhyme about “sticks and stones”.  But these words and presumptions can hurt and do serious harm.  They marginalize.  They stigmatize.  And they invalidate.
People who discourage some of the things I’ve mentioned are often called overly-sensitive or zealously politcally-correct.  I admit, I used to think that, too.
But I’ve seen just how detrimental these stigmas can be.  So today, I write this post to implore people to be less judgmental, to be more conscientious about the words you use and the assumptions you make.
If you’re depressed – there is no shame in consulting a psychiatrist.  If you’re gay, there are places to find love and support.  If you’re struggling with debt, talk to a bankruptcy attorney.  Don’t let the opinions of narrow-minded people deter you from getting help.
There are plenty of resources out there, no matter what you may be dealing with.  But you must take the first step, and liberate yourself from these social stigmas.

Bankruptcy Mythbusting #2

Myth:  I don’t want to file for bankruptcy because [fill in the blank] will find out!
Fact:  Most people find bankruptcy to be a humiliating experience, and are afraid that anyone and everyone – from friends and family to neighbors and coworkers – will find out their secret.
First of all, I think the stigma is unnecessarily exaggerated.  Many people find themselves in bankruptcy through no fault of their own – from disastrous medical events, being laid off in the bad economy, or a vehicle needing expensive repairs.  Even those who find themselves in bankruptcy – at least partially on their own accord – shouldn’t feel overly guilty.  This country has never emphasized financial education in its schools, so very few of us know how to read a contract, or fully appreciate the effect of interest and loan terms on debt.  People make mistakes, and those mistakes needn’t destroy you for life.  The trick is to learn from them so you don’t repeat the same mistakes.  Bankruptcy gives you that fresh start.
The fact of the matter is that a LOT of people file for bankruptcy.  Undoubtedly (and statistically), you are acquainted with several people who have filed for bankruptcy.  You might just not be aware that they filed for bankruptcy.  In the state of Wisconsin, I would estimate that between 25 and 35,000 people file for bankruptcy each year.
So who will find out?  For the most part – those who will find out will be (a) your creditors – the bankruptcy court has to send out notice to all of your creditors, and (b) anyone who pulls your credit report for the next 10 years.  It is uncommon for anyone else to find out you filed for bankruptcy.
Yes, bankruptcy is a matter of public record.  Wisconsin residents may be familiar with Wisconsin Circuit Court Access (CCAP), which is a free, publicly accessible, searchable database of all state court cases.  The good news is that bankruptcy cannot be found on CCAP.  Why?  Because CCAP is a database of state court cases.  Bankruptcy is a federal court case.
The federal courts have an analog to CCAP called PACER, but unlike CCAP, you must have a paid login to access it.  For the most part, the only people with access to PACER are legal and financial professionals who need to access these sorts of records.
Newspapers and tabloids often feature news about bankruptcy for celebrities and airlines.  However, they do not publish notices of bankruptcy for ordinary individuals.  That’s because (a) publication by newspaper is not valid form of notice in bankruptcy procedure and (b) there are simply too many bankruptcy cases to fit in an ordinary publication.  I am aware that back in the day, bankruptcy cases used to be published in the newspaper, and I cannot categorically deny that there isn’t some backward newspaper in some corner of the country that still does this.  However, I am unaware of any newspaper in the state of Wisconsin that does this.
Your friends, family, and neighbors are very unlikely to discover your bankruptcy unless you tell them, or unless you owe them money.  Remember, there’s a very good chance several people you know filed for bankruptcy, but you don’t know that they filed.
Employers are slightly more likely to find out you filed for bankruptcy.  This is true of anyone who files Chapter 13 bankruptcy and has a payroll deduction order for the plan payments (most trustees are flexible and will allow you to make direct payments if this is a concern, so long as you remain current on your plan payment commitments).  Employers would also find out if you are currently having your wages garnished, and your attorney needs to notify your payroll department of the bankruptcy to terminate the garnishment.  Most people feel that the wage garnishment dulls the humiliation factor of bankruptcy.
Want to find out what bankruptcy could mean for you?  Call (920) 490-6160 now to schedule a free consultation.

Top 5 Reasons People Won’t File for Bankruptcy

Shame / Guilt / Desire to Honor Debts
Although there are some people out there who think they are entitled to a bankruptcy once every 8 years, and file every 8 years like clockwork, most people try to avoid bankruptcy. They were taught by their parents to honor contracts, and that if you incur a debt, it’s on you to pay it. This is an admirable goal, and I’d be lying if I said I didn’t share that sentiment. But my role as your bankruptcy attorney is to ensure that you do what is in your financial best interests, and that you don’t have to repeat this again in the future. Sometimes, as distasteful as it may be, bankruptcy is the most fiscally responsible thing you can do for yourself. If you feel really, really bad about bankruptcy, visit a psychologist with all the money you’ve saved from the bankruptcy. Don’t make a bad financial decision based on a bad emotion. Chances are, that’s what landed you in financial troubles in the first place. Also, consider this. Say you have $20,000 in debt. You consider bankruptcy, but decide against it because you feel obligated to pay that $20,000 back. Five years later, you have been unable to get caught up. With interest, late fees, and penalties, your debt has now mushroomed to $40,000. You finally give in and file for bankruptcy. Now, instead of discharging $20k, you have to discharge $40k. Did you do the creditors any favors? No. Sometimes, the best advice is to nip a problem in the bud before it swells into something worse.
Fear of Being Outed
A lot of people are convinced that if they file for bankruptcy, their family, friends, and neighbors will all find out about it. Generally, this is untrue. Sure, bankruptcy is a matter of public record. Of course, all of your current creditors find out when they receive notice of your case from the bankruptcy court. People who have to pull your credit report, loan officers, landlords, etc. – they will know. Your employer, on the other hand, will not know unless they are a creditor of yours, you have a current wage garnishment, or you will be under payroll deductions for a Chapter 13 Plan. Same goes for family and friends – they’ll only know if they are one of your creditors. Bankruptcy is a matter in federal courts, not state courts. Therefore, it is not listed on free, public-access court case databases like CCAP. To find a bankruptcy case, you have to search on PACER, which is a fee and account based search engine. And generally, the only people who execute PACER searches are attorneys engaged in the same kind of work I am involved in. Bankruptcy cases are not published in any newspaper that I am aware of (high-profile celebrity or corporate bankruptcies sometimes make headlines, but we don’t do newspaper notices like they do in state court). Just remember that tens of thousands of people file for bankruptcy each year in Wisconsin. Chances are, you know someone who has filed for bankruptcy. You just don’t know that they filed for bankruptcy unless they feel like sharing that with you.
Fear of Losing Property
Many people fear that by filing bankruptcy, they lose all of their worldly possessions, or some other variation on that theme. I certainly can’t promise that you won’t lose something in a bankruptcy. However, events like that are relatively rare – usually reserved for the extreme cases where someone is sitting on an oil well or a gold mine. The vast majority of my clients lose nothing, except for their debt. They don’t make enough money to need to file Chapter 13, and they don’t own anything of sufficient value to pique the trustee’s interest. Of course, which category you fall under depends on the specific facts of your case, so talk to an attorney before convincing yourself that you’ll lose it all in bankruptcy.
I can’t file due to the new bankruptcy laws.
Rubbish. I wouldn’t be practicing bankruptcy if the new laws banned new filings. In 2005, Congress attempted to make bankruptcy more difficult to file, and did create laws that force more people into Chapter 13 repayment plans. But really, they weren’t very successful. In fact, I have found people qualifying for Chapter 7 who would not have qualified under the old laws. Congress made the process slightly more annoying, but only marginally so. It literally is something to sneeze at.
Attorney’s Fees
Obviously, if you’re in a position to file for bankruptcy, you’re probably not at home, rolling around in Ben Franklins. On the other hand – like everyone else in this world, we don’t work for free. Most Chapter 7 debtors average somewhere between $20,000 to $80,000 in unsecured debt. Even on the low end, the benefit to cost ratio is extremely high, especially when you consider the interest rates on most unsecured debts. I encourage you to shop around for the best value attorney. However, I do not recommend jumping at the lowest price tag. Remember – you get what you pay for. Know exactly what you’re getting for what price. Be especially careful that you know the full price – many attorneys just quote you their own costs, and leave off the court’s filing fees to make their price sound cheapest. Make sure you know about ALL of the fees, including the court’s fees, so that you are comparing apples to apples, not apples to oranges.

Who will know I filed for bankruptcy?

Naturally, all of your creditors will receive notice that you filed for bankruptcy. Otherwise, they wouldn’t know you discharged your debt. Employers are not notified unless (a) you owe a debt to your employer, (b) you are currently being garnished and your attorney has to send your employer a notice to stop the garnishment, (c) you file Chapter 13 and your plan payments are taken out as a payroll deduction.
Bankruptcy is a matter of public record, but I am not aware of any region that publishes them in the newspaper anymore. Quite frankly, there are far too many bankruptcies being filed. Based on current filings, I would estimate that the state of Wisconsin will bear somewhere between 20-25,000 filings in 2009. You are far from alone, particularly given the nature of the current economy.
Pretty much the only people who bother searching for bankruptcy cases in public records are debtor attorneys and creditors. Most people think that they don’t know anyone else who has filed for bankruptcy. In reality, the average debtor (unbeknownst to them) has several close family and friends who have filed.