The town of Brokaw, Wisconsin, has been facing a difficult debt situation since a paper mill closed in 2011, leaving them to shoulder the costs of a then unnecessary water utility. As the town's debts grew, it became more and more clear that some sort of radical option may be necessary. The town hired a consultant to review their situation and recommend courses of action to help them recover.
The options that consultant recommended were difficult for the town to hear. He recommended either pursuing bankruptcy protection or dissolving the town and transferring its assets to the neighboring towns of Maine and Texas while taxable property would transfer to Wassau. Under current Wisconsin law, a municipality cannot declare bankruptcy. This leaves the residents of Brokaw with the option of persuading the legislature to change the law regarding municipal bankruptcies or to accept the dissolution of the town.
Few people in Brokaw want to see their property rolled into Wassau for a variety of reasons. Small business owners have expressed concerns regarding zoning changes that may affect their businesses, for example.
Currently, state legislators are expressing doubt that the law can be changed in such a way as to allow Brokaw to file for bankruptcy. This leaves Brokaw likely facing dissolution and the loss of assets and property.
The unfortunate reality here is that if Brokaw were able to file for bankruptcy, it would be able to manage the resolution of its debts under the watchful eye of a trustee with various protections in place that could possibly exempt particular assets or property from needing to be transferred to neighboring towns.
If you are an individual or business owner facing challenging debt, you need to understand what options are available for you. The bankruptcy process is designed to facilitate the resolution of debts in the most expedited fashion so people can begin rebuilding their financial lives. Discuss your situation with an experienced bankruptcy attorney to learn about the protections that are available.