Wisconsin Bankruptcy Facts
Bankruptcy is a federal process in which a debtor (consumer or business) declares they are unable to pay back what they owe to creditors. It was initially created as a method to help creditors get back what was owed to them by debtors, but has developed into a tool used by debtors themselves voluntarily when financial burdens become too rough. There are several chapters of the U.S. Bankruptcy Code that can be filed, each catering to a different kind of debtor and different financial situations. Filing for bankruptcy in Wisconsin is not simple, but we are here to help make the process as easy and smooth as possible for you. Our site can help you find and choose a bankruptcy attorney who will make your case a top priority and who will help you decide which chapter is best for your individual needs.
But before contacting a legal representative, we also want you to be as informed as possible regarding the many laws that govern Wisconsin bankruptcy proceedings so you can gain an understanding of what to expect during proceedings.
What Kinds of Debt Can Be Discharged During Bankruptcy?
Although bankruptcy protection can get rid of many kinds of debt, it’s important for those who are considering filing to understand that not all debts can be eliminated. Only unsecured debts, debts that are not backed by assets, can be discharged, including credit card debt, medical bills and business expenses.
The following are debts that are not eligible for discharge in Wisconsin through bankruptcy protection:
- - Child support
- - Alimony
- - Student loans
- - Debts obtained through fraud
- - Debts obtained though the willful injury of another or through personal injury accidents involving alcohol intoxication
Choosing Which Bankruptcy Chapter to Petition the Court For
There are six different bankruptcy chapters that can be filed in Wisconsin, but by far the most commonly sought are Chapter 7 and Chapter 13. Chapter 7 involves a debtor’s assets being liquidated in exchange for the discharge of their unsecured debt. Chapter 13, on the other hand, calls for debtors to be placed on a court-appointed payment plan to reimburse creditors over a period of time. Each of these chapters leads to very different outcomes, so learning about each one is the best way to gain a good understanding of what you can expect and which you most qualify for, if not both.
Chapter 7 Bankruptcy
- - Can be filed by both individuals and businesses as long as income is below the state median or debtor cannot pay 25 percent of their debts back
- - Assets are liquefied to discharge debt
- - Most – if not all – unsecured debt is discharged giving debtors a fresh financial start
- - Some assets are exempt from liquidation, such as the debtor’s home and pension plans
- - Proceedings resolve quickly (three to six months) – There is no minimum amount of debt required to file
Chapter 13 Bankruptcy
- - Can only be filed by individual debtors, not businesses
- - Ideal for debtors who have steady income, do not want to liquidate assets, do not qualify for Chapter 7, or are facing foreclosure
- - Debt may be reduced but it is never 100 percent wiped out
- - No assets are liquidated
- - Debtor pays creditors back over a period of three to five years
- - Easier to qualify for than Chapter 7
Obtaining Legal Counsel
If you are tired of struggling with unmanageable debt and want fast and successful debt relief, contact one of our featured Wisconsin bankruptcy lawyers today to discuss your best options regarding bankruptcy protection. Our attorneys aim to make the process as smooth and quick for you and will protect your rights every step of the way.