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What Wisconsin residents can learn from a city's bankruptcy

More often than not, Appleton and Outagamie, Wisconsin, residents think of a bankruptcy filing as the "kiss of death." The last moment before the end occurs. This could be what people are thinking since Detroit finally filed for bankruptcy. However, residents in debt can learn a valuable lesson from the struggling city. They will also, hopefully, acquire a fresh financial start as they learn more about the advantages of bankruptcy.

Detroit's situation resembles the struggles of people who are immersed in debt. Employees rely on the city for wages and benefits. On the other hand, a family relies on a member of the family to earn money in order to provide basic needs. Much like the city that is facing billions of dollars in unsecured debts, a person can also struggle because of mortgages, credit card debt and loans.

The initial course of action would be to evaluate the person's spending habits, which is what the city did. It is important to nip unnecessary to scale back on any unnecessary spending, and sell unwanted or unused items around the house. If all else fails, it may be best to take the route that Detroit took, and file for bankruptcy.

Although the city filed for Chapter 9, there are other options for Appleton and Outagamie, Wisconsin, residents who are struggling with debt. For one, they can choose to file for Chapter 7. Although filing for bankruptcy has received undeserved attention from people unfamiliar with its advantages, unbeknownst to most, filing for bankruptcy can be a saving grace.

It can help to stop creditor harassment, alleviate wage garnishment and provide a legal way of paying off debts while still remaining afloat. Moreover, the process of Chapter 7 moves rather quickly. Appleton and Outagamie residents may be able to have a fresh financial outlook in as soon as four months. Residents seeking peace of mind from debts who also wish to protect their assets may wish to seek the guidance of a legal representative to help them assess if they qualify for bankruptcy protection.

Source: The Christian Science Monitor, "Personal finance lessons from the Detroit bankruptcy," Trent Hamm, July 26, 2013.