Bankrupt

The Screnocks only handle family law, which means basically we do divorce, legal separation and custody issues. Sometimes we wind up doing something else -- like a will or probate -- because it is part of the overall situation with one of the clients. But mostly we just do in-family fights.

Another attorney, Roger Merry, uses our office, though, to meet with people filing for bankruptcy. His own office is in Monroe, which is about 70 miles away. He is one of the only attorneys in this part of rural Wisconsin who specialize in bankruptcy, though, and he is a sort of circuit rider, meeting with clients in several counties and towns, of which Baraboo is one.

The Baraboo paper has an article this morning about the increase in bankruptcy filings in Sauk County, and Roger is quoted several times:

Nearly twice as many Sauk County residents filed for bankruptcy in the first six months of this year as had at this time last year, mirroring a trend in which bankruptcy filings are up nearly 50 percent across Wisconsin, court records show.

"Everybody who thought about filing filed [in 2005 due to a change in the law], so in 2006, there were very, very few cases," said Roger Merry of Merry Law Offices in Monroe, who has an office in Baraboo. "But I think you have to look at it as 90 percent of bankruptcy is caused by one of three things — unexpected loss of income, uninsured medical expenses or divorce — and that keeps happening to us no matter what."

The new requirements have proved to be stumbling blocks for families of four making $70,000 to $75,000 a year, for example — well above the median income but crippled by a financial crisis nonetheless, he said. Those families are now typically entered into a three-year payment plan instead of filing Chapter 7.

"In the Baraboo area, there aren't that many people making $75,000, so it doesn't have a realistic deterrence in the rural areas like they had hoped," Merry said.

Merry said he also sees clients getting into trouble with credit cards — but not usually for frivolous spending.

"For the most part, I see people using credit cards as a means to try to stop from going under — we can't make it this month, we'll let the credit card balance just go higher," he said. "The mounting credit card debt from the cases I see is that it was a good idea and a noble attempt to pay all your bills, but then when something goes wrong and you miss a payment and they raise your rate from 8 percent to 29 percent, then it's over."

Ironically or sadly, because the new law requires more paperwork and investigation, legal fees from bankruptcy have increased by about 50% in the last couple of years, too. So not only does it cost you more to say you are broke, as I understand it, the lawyer is the first on the list of creditors to get paid, so you are also left with less to try to pay anyone else off or to try to start over.

Recently another law office opened in Baraboo to handle bankruptcies, whereas Roger used to be the only lawyer in the county doing them. I guess other people's problems are good for some businesses.