There are many contributing factors that are associated with financial troubles. The most common reasons include heavy debt, sudden unemployment, divorce, foreclosure, or serious illness.
In fact, the average credit card debt in Wisconsin is a whopping $4,693 per person. In addition, foreclosure rates are also as staggering, one out of every 3,012 WI homes is currently in foreclosure.
If you have found yourself in similar situations, then you are probably facing other personal problems that come with being in debt. The fear of losing your car, home or your income can drain a person mentally & physically. You have probably even considered Declaring Bankruptcy .
If you are thinking “Can I File Bankruptcy?” you are definitely not alone. Close to a million people file bankruptcy each year in the United States. Bankruptcy is a tool established by the US Government to help struggling Americans find relief from massive debt. You may want to consider personal bankruptcy if it’s best for you.
What Is Bankruptcy?
Bankruptcy offers people the freedom to resolve their debt while still working with lenders in a legal capacity. It is initiated by a person filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or married couples jointly. When the bankruptcy is done, the filer will ‘exit’ and will have a chance for a fresh start on their finances.
Throughout the bankruptcy process, a trustee is appointed to oversee the particulars of the matter. His or her duties differ and depend on whether the person has filed for Chapter 13 or Chapter 7 bankruptcy.
Did you know that Wisconsin ranks #11 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 369 out of every 100,000 residents.
What Is The Difference Between Chapter 7 And Chapter 13?
People in Wisconsin, who claim bankruptcy, can choose to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. Want to know the difference? Look below for more information
The trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding, In exchange for dissolving all past due debts.
Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation
If you have the means to pay some of your debts, a chapter 13 bankruptcy plan may work for you. You will be allowed to retain your valuable assets over a 3- to 5-year time frame.
In order to decide which type of bankruptcy an individual will file, he or she will have to assess their ability to repay under the Bankruptcy Means Test.
What Is A Bankruptcy Means Test?
The objective of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:
- income and expenses
- household size and composition
- debt-to-income ratio
If you do not qualify for Chapter 7 bankruptcy, you will be able to file for Chapter 13, as above-described.
What Are Bankruptcy Exemptions?
The federal bankruptcy exemptions are a list of exclusions by Congress that are available to filers in specific states. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.
- Property you occupy or intend to occupy to $75,000; $150,000 for married couples filing jointly. Sale proceeds exempt for 2 years after sale provided you intend to acquire another home (this represents the doubled amount available to spouses.
- Wages of inmates who are under a work-release plan.
- County jail prisoners’ wages.
- County work camp prisoners’ wages.
- 75% of net wages or 30 times the state or federal minimum wage, whichever is greater. Judge may approve more for low-income debtors.
- Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
- IRAS and Roth IRAs to $1,283,025.
- Public employees.
- Certain municipal employees.
- Police officers and firefighters who work in a city greater than 100,000 people; military pensions; and public and private retirement benefits.
- Veterans’ benefits.
- Unemployment compensation.
- Social service payments.
- Crime victims’ compensation.
- Workers’ compensation.
Tools of Trade
- Equipment, inventory, farm products, books, and tools of trade up to $15,000, or like amount in a closely-held business.
Alimony and Child Support
- Alimony and child support needed for support.
- Fraternal benefit society benefits.
- Life insurance proceeds if policy prohibits use to pay creditors.
- Unmatured life insurance contracts up to $4,000 in value in accrued dividends, interest or loan value (except for credit life contracts) if owned by debtor and insuring debtor, dependent, or person debtor is dependent upon; federal disability benefits; life insurance proceeds if debtor was dependent upon insured, to extent necessary to support debtor or family.
- College savings account or tuition trust fund.
- Wages used to purchase savings bonds.
- Tenant’s stock or lease interest in co-op housing up to homestead amount.
- Automobile up to $4,000 (plus any of the $12,000 personal property exemption that is unused).
- Household goods and furnishings; wearing apparel, keepsakes, jewelry, appliances, books, musical instruments, firearms, sporting goods, animals or other items for family use up to $5,000 total.
- Bank deposits up to $5,000.
- Wrongful death proceeds needed for support.
- Personal injuries recoveries up to $50,000.
- Fire and casualty proceeds for destroyed property that is exempt for 2 years of receipt.
- Lost future earnings recoveries needed for support.
- Burial plot, tombstone, coffin.
Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.
Filing Bankruptcy Alone vs. Filing With An Attorney
Current bankruptcy laws do not require filers to hire a lawyer to declare bankruptcy relief. People are permitted to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Filing alone is not for the faint of heart.
Filing Bankruptcy without an Attorney
A basic Chapter 7 proceeding that doesn’t have a lot of debtors or assets may be easy to manage on your own.
A basic bankruptcy that doesn’t require an attorney might look like:.
- Your income is below the state median;
- You have no property;
- Your debts will be considered dis-chargeable.
Working With An Attorney
Generally speaking, it is usually in one’s best interest to work with a bankruptcy lawyer. A bankruptcy attorney is there to represent you and not in the interest of creditors.
An attorney is also accustomed with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.
While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.
What Does Bankruptcy Include?
Once you file for bankruptcy in WI, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.
In any event, Bankruptcy will be able to include:
- credit card debt
- protection from eviction
- avoidance of foreclosure
- utility bills
- medical expenses
Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.
Final Thoughts And Considerations On Filing For Bankruptcy In Wisconsin
As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.
Bankruptcy Courts In WisconsinRobert W. Kastenmeier United States Courthouse
120 North Henry Street
Wisconsin Western Bankruptcy Court
United States Courthouse
500 South Barstow Street
Eau Claire,WI 54701
Wisconsin Western Bankruptcy Court
Additional Wisconsin Resources
Foreclosure Help Program
Disability SSDI Benefits