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Top Reasons for Bankruptcy in Minnesota & Wisconsin

It’s not unusual for someone to face a financial hardship at some point in life, and many reasons why you might be struggling. Here are the top ten reasons we have identified why most would file for bankruptcy.

Top Reasons for Bankruptcy

1. There’s not enough money for the basics.

When your household budget is tied up trying to keep up with credit card or medical debts, rather than providing food for your family or needed prescription medications. With so many reasons someone might consider filing bankruptcy, none is more important than the financial security of your family.

2. Banks have garnished your wages or froze your accounts.

Whether you work in the Twin Cities area of Minnesota, or the midwest communities of Wisconsin, filing for bankruptcy can stop creditors from taking control of your wages, and in some cases, can even recover wages creditors have garnished from you over the past 90 days.

3. Payday loans and creditors are auto-debiting your financial accounts.

Filing bankruptcy can immediately halt cell phone and cable companies, as well as internet lenders and Payday loan companies from automating withdrawals from your personal bank accounts.

4. You have judgments or bench warrants out.

If a creditor is able to successfully obtain a judgment against you and your property, they have the right to ask the courts for an “Oder for Disclosure” which will compel you to advise creditors where you work in an effort to garnish wages, or where you bank so they can levy your financial accounts. Additionally, judgments could create a lien against your real estate property for 10 years or more until debts are settled. A lien on your property means you cannot sell your home with a clear title until those creditors are paid, and this could impede you from obtaining additional credit or home loans. However, in many cases  you can get judgments released after your bankruptcy is successfully completed.

 5. You’re trying to save your home from foreclosure or your car from getting repossessed.

If you home threatened with foreclosure or your car is facing an active repossession, you have a right to file for bankruptcy and reorganize your debts.  A reorganization of your debts could help keep you in your home and securing transportation for you and your family.

6. Dealing with 2nd mortgage lawsuits after a foreclosure or short sale.

The 2008 recession effected many homeowners who lost their homes through foreclosure and short sales. With homeowners throughout the U.S.; including Minnesota and Wisconsin feeling the squeeze, the effect was not unique to a select few.  Then, to add to the agony, many of those same families who lost their homes also faced a lawsuit by the 2nd mortgage holder. But, a bankruptcy filling could erase the 2nd mortgage debt in many cases; giving you a fresh start.

7. Accumulating mass medical debt.

Unfortunately, with rising costs of prescriptions, hospitalization and emergency care, few people can afford to be really sick. And, with the uncertainty of insurance coverage, it only takes one medical challenge to put a person in a financial hardship.  Bankruptcy can help stop the collection calls.

8. Clearing old income tax debt.

Although it’s true that discharging tax debt in bankruptcy could be more complicated, it is still possible to erase old tax debts. With that said, it’s important to know the rules are complicated, so it’s in your best interest to call for a free consultation to learn about your individual options.

9. Business debts weighing you down.

The Great Recession effected many business owners; especially small business owners and contractors. Many lost their businesses, but still had mass amounts of debt leftover from the business they struggled to pay off like credit card debts or small business administration loans. Discharging those debts through bankruptcy can help provide a fresh start.

10. Going through a divorce or rough dissolution of partnership

Who wants to end a relationship, or even start a new relationship the heaviness of mass debt on their shoulders? Bankruptcy could be the fresh start either party needs to clear the slate.


Of course, there are many more reasons someone might consider bankruptcy, and everyone’s individual situation is unique, but if you want to turn over a new leaf this year, you should contact Piletich & Skokan to schedule a free initial consultation.

Available Evenings and Weekends. We’ll come to you!


  1. Michael Rundquist says:

    I live near your Stillwater Office and wish to meet there. Do you offer a free initial consultation to discuss bankruptcy? If not, how much would that cost? What is the best way to make an appointment?
    I have unpaid medical debt, credit card debt with one judgement and one pending, and back taxes to consider.
    I have no savings, retirement accounts, home,
    automobile or other property. No rent either.
    What would I need to bring in to initiate the process?

    Thank you.

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