We’ve written a series of blog posts answering common questions regarding bankruptcy in Wisconsin, and how it can impact your finances. Call (262) 827-0375

When Should I File for Bankruptcy? How to Determine if Filing is Right for You

You’re feeling overwhelmed. The credit card payments or medical bills are just too much to keep up with in addition to your car payments, student loans, mortgage/rent, and other monthly bills. You’re paying absurd monthly interest charges and never seeing the capital decrease significantly. It’s just impossible to keep juggling all your financial obligations. It’s time to think seriously about your debt management problems. In this blogpost, we will explore the options of debt consolidation and bankruptcy.

Debt Consolidation: What Is It?

In its most basic form, debt consolidation works by combining multiple debt payments into one monthly payment through obtaining either a secured or unsecured loan. That monthly payment is sometimes lower than the individual payments combined, and the interest you pay is sometimes lower as well. You will maintain your access to credit, though incurring more debt increases the likelihood of the debt consolidation failing. If the debt consolidation loan is secured, then you risk losing your collateral, usually your car or other significant tangible property.

Cross-Collateralization

Sometimes you may risk losing collateral that you aren’t aware you have placed in jeopardy. That can happen when your debt consolidation loan has a cross-collateralization clause that lets the lender take other property it has financed if you default on the debt consolidation loan. For example, if you get your debt consolidation loan through the same bank that financed your car, under the cross-collateralization clause, if you default on the debt consolidation loan, the bank could repossess your car—even if the car payments are current.

Debt Management Plans: Hidden Costs

Some people go to an agency that creates a debt management plan for them and negotiates with the credit card companies on your behalf. It’s important for you to know that agreeing to a debt management plan comes with a number of hidden costs – monetary and otherwise. You will be expected to pay an enrollment fee as well as a monthly fee for each credit card on the plan. Also, most credit card companies will require that an account entering into a debt management plan be closed, so you lose your access to credit. And the fact that you’re engaged in a debt management plan will be noted on your credit report. Most debt management plans run for three to five years, and at least half of clients do not successfully complete the plan.

Negative Tax Consequences
Depending on your financial condition, any money you save from debt relief services such as debt consolidation may be considered income by the IRS, which means you pay taxes on it. Credit card companies and other creditors may report settled debt to the IRS, which the IRS considers income.

Debt Consolidation vs Bankruptcy

There are two types of bankruptcy you can pursue: Chapter 13 and Chapter 7. Chapter 7 is means tested, so you need to make no more than your state’s median household income ($60.773 for Wisconsin).* If you qualify for Chapter 7 bankruptcy, your unsecured debt can be completely eliminated. The whole process takes about four months, and then you can start over with a clean slate. Chapter 13 bankruptcy lasts between three to five years, similar to debt consolidation. With Chapter 13 bankruptcy, the moment you file, there is an automatic stay on all collection action, and you will almost certainly retain possession of your home and vehicle.

If you’re considering debt consolidation vs bankruptcy, it would be a good idea to talk to one of the experts at Burr Law.

Should I File for Bankruptcy Before or After Christmas? How to Survive the Holidays

When your finances are in disarray, it’s hard to enjoy let alone survive the holidays. You want to focus on your family and friends, not your financial difficulties. It’s hard to have the emotional capacity to consult an attorney about bankruptcy during this already emotionally challenging time of year. Yet, bankruptcy is a viable option, and it may be wisest for you to file before Christmas. Timing is crucial, and in this post, we look at the various factors you need to consider when making the decision to file for bankruptcy.

Two Types of Personal Bankruptcy

There are primarily two types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy takes only about four months from start to finish, and can eliminate almost all your debt. With Chapter 13 bankruptcy you retain your debt, and a way to pay off your obligations is worked out. It takes between three and five years. So the first thing to figure out when you are considering bankruptcy is whether or not you qualify for Chapter 7.

Income Matters

Filing for Chapter 7 bankruptcy is means tested; you must not earn more than the median household income for your state. In Wisconsin, the median household income was $60,773 in 2018 (according to figures released by the US Census ACS on September 26, 2019). The size of your household matters as well, and the bankruptcy experts at Burr Law can help you know definitively whether or not you qualify for a Chapter 7 bankruptcy.

Timing Matters

Importantly, “income” excludes any money received during the actual calendar month in which you file. The median household income is determined by the numbers during the six calendar months prior to the filing. So, for instance, if you generally receive a holiday bonus in December, or your parents give you a monetary gift to help with presents for the children in December, it would be a good idea to file for bankruptcy before Christmas. Filing for Chapter 7 bankruptcy in December will mean that your household income will be calculated based on the numbers from June 1 through November 30. Survive the holidays by beginning the bankruptcy procedure when the means testing will work in your favor.

Non-dischargeable Debt

If you imagine that you can charge wonderful Christmas presents on your credit cards, and have a spectacular holiday, and then file for bankruptcy, that will not work at all. Bankruptcy law states that any debt incurred during the three months before or after Christmas that exceed $600 and that are not living necessities may be non-dischargeable debt. That particular creditor could file an adversary proceeding to determine that that debt is non-dischargeable. That means that you could be responsible for any purchases made during that time. When you file for Chapter 7 bankruptcy, your credit card use will be carefully examined to determine whether or not charges were “necessary.” Those deemed unnecessary could be non-dischargeable debt, and you may remain responsible for them. So filing for bankruptcy before or after Christmas will not make any difference to the categorization of non-dischargeable debt. Other non-dischargeable debts are certain income tax owed, domestic support obligations, debts to governmental agencies, and student loan debt.

Surviving the holidays is even more difficult when your financial situation is a mess. Even though you may be reluctant to confront the situation before Christmas, it may make a big difference in what kind of bankruptcy you can file and how your income is calculated. Make the time to consult one of our bankruptcy professionals at Burr Law today.

When Does Bankruptcy Clear From Your Credit Report?

If you’re considering filing for bankruptcy in Wisconsin, you probably have a lot of bankruptcy questions. It’s important for you to have all the information you need in order to make a truly sound decision, and in this post, we will look at one of the most commonly asked bankruptcy questions: When does bankruptcy clear from your credit report?

Credit reports are simply a fact of contemporary existence, and they are consulted every time you apply for a new credit card, or an automobile loan, or any type of financial undertaking. You may not be aware that in Wisconsin credit reports are also considered by landlords, and by some employers. So concern about your credit report is absolutely reasonable when making the decision to file for bankruptcy.

Filing for bankruptcy becomes part of the public record, so if anyone is truly interested in the bankruptcy filing itself, they can access that information.

Generally speaking, bankruptcy stays on your credit report in Wisconsin for about 10 years. Remember, though, that even if you don’t file bankruptcy, your creditors can obtain a judgment against you for your debt, and that judgment would appear on your credit report. A judgment can remain on your credit report for seven years or until the statute of limitations expires, whichever is longer. In Wisconsin, the statute of limitations on a judgment can be up to 20 years! So a bankruptcy may well fall off of your credit report before a particular judgment.

Bankruptcy will mean a drop in your credit score immediately after filing, but about 12 to 18 months after you receive your bankruptcy discharge your credit score should go up because your debtor to income ratio becomes much better than when you filed the bankruptcy. However, you may already have a poor credit score due to your debt-to-asset ratio (your debt is high compared to your available credit) and delinquent accounts; in that case, the decrease in your credit score may be less than you suppose. If your credit score was good before filing bankruptcy, the drop may be more pronounced.

The type of bankruptcy that you file may also affect how its presence on your credit report is viewed by prospective lenders. Chapter 7 Bankruptcy completely wipes out your debt by selling whatever eligible assets you have; Chapter 13 Bankruptcy sets up a three to five year plan to repay a portion of your debt. Obviously, prospective lenders would consider a Chapter 13 Bankruptcy in a more favorable light than a Chapter 7 Bankruptcy. When applying for credit after bankruptcy, you should be straightforward about the bankruptcy and your reasons for choosing that option.

Attorney Michael Burr and the Burr Law Offices can answer all of your bankruptcy questions. You concern about your credit report is certainly warranted, and we can help you understand all the implications of a decision to file bankruptcy. Consult the experts in Wisconsin bankruptcy law at the Burr Law Offices, and bring all your bankruptcy questions with you.

Bankruptcy Pros and Cons

When you’re in financial distress, it can sometimes seem like there is no way out. There are all different kinds of reasons people find themselves flailing in a sea of debt. Whatever the reason, when creditors are circling sharks, bankruptcy may be the lifeboat you need. Over 12,000 Wisconsinites have filed bankruptcy so far this year (January 1 through September 30, 2019). In the Eastern District of Wisconsin (including Milwaukee and its surrounding areas), 9,466 bankruptcy cases have been recorded
(www.wiwb.ucourts.gov, www.wieb.uscourts.gov). So bankruptcy is neither shameful nor unusual.

Filing for bankruptcy is a serious decision, though. You want to have all the information and understand all the implications before proceeding. Let’s take a look at some of the bankruptcy pros and cons.

PRO: Bankruptcy Stops All Collection Activities By Any And All Creditors. When your debt is crippling, it comes with collection agents working relentlessly to extract money you don’t have. Letters that threaten dire consequences, phone calls that badger you at all times of day or night, these tactics can make you feel hunted, haunted, or both. The moment you file bankruptcy, all collection activities must stop, including any garnishment, foreclosure or repossession.

PRO: Bankruptcy Eliminates or Decreases Debt. With bankruptcy, all your unsecured debt is either eliminated or reduced. Most people file Chapter 7 Bankruptcy, and with that type, you don’t need to worry about any sort of repayment. “The entire process takes from 3-6 months, after which your debt is cleared” (David Chandler, https://www.consumeraffairs.com/finance/bankruptcy_02.html). Some people choose Chapter 13 Bankruptcy, and with that type, you do repay a portion of your debts, determined with the court. This process lasts from 3 to 5 years. In both cases, your debts are cleared, once and for all.

PRO: Bankruptcy Avoids Draining Resources. The bill collectors don’t care where you get the money to pay them, and you may be tempted to take it from your retirement funds, social security or other protected assets. When you declare bankruptcy, not all your assets are liable for your debt repayment. Social security and retirement funds are protected. Filing bankruptcy allows you to retain those protected assets while getting rid of the debt.

CON: Bankruptcy Means No Credit Cards Until You Receive Your Bankruptcy Discharge. While bankruptcy rids you of your debt, it also rids you of your credit cards. Not having credit cards makes some things more difficult. For instance, car rental agencies usually require credit cards; hotels often do too. It also means that unexpected large expenses cannot be paid with a credit card; car repairs may need to wait. Once you receive your bankruptcy discharge you can apply for credit, including credit cards and you should receive that credit or credit card.

CON: Bankruptcy Complicates Credit/Loan Prospects. Bankruptcy remains on your credit record for 10 years, and it can make getting an auto loan or other kind of loan more difficult, but not impossible. And while you may receive credit card offers shortly after declaring bankruptcy, they often come with high interest rates. Naturally, your credit rating will drop, but will improve and be back to normal about 1 year after bankruptcy discharge. Professional advice can assist in charting a positive strategy and ways to improve your credit score.

CON: Bankruptcy Becomes Public Record. When you file for bankruptcy, it becomes a matter of public record, and anyone can request those records. Except it will not appear on the State of Wisconsin, CCAP website, which list case filed in Wisconsin.

A Wisconsin legal team that specializes in Chapter 7 and Chapter 13 bankruptcy proceedings can help you make the right decision for you and your family. If you need help with dealing with debt in Wisconsin, Burr Law Office can provide you with practical solutions that suit your needs. We can help you make the best possible decisions for yourself, your family and your future. Call us today at (262) 827-0375 to schedule a free bankruptcy evaluation. At Burr Law Office, we are here to help.

erasing debt with a green eraser

Bankruptcy and Debt Consolidation in Wisconsin

Bankruptcy can have long-term effects on the financial prospects of individuals and families in our area. In many cases, working with a knowledgeable law firm to negotiate debt consolidation in Wisconsin can allow consumers to manage their debts more effectively.

Debt is a huge problem in our country. According to credit bureau Experian, consumer debt soared to $13 trillion in the last quarter of 2018. This represents a serious burden on residents of Wisconsin as well as those throughout the United States. While the Milwaukee Journal Sentinel reported in January 2019 that bankruptcy filings declined for the eighth consecutive year in 2018, farm bankruptcies are on the rise. About 49 farm families filed for bankruptcy in Wisconsin in 2018. That figure is more than double the number of farm bankruptcies in 2009. This increase in bankruptcies corresponds with a recent U.S. Department of Agriculture report that U.S. farm debt amounted to more than $309 million in 2018.

The Basics of Bankruptcy

All bankruptcy cases must be filed in federal courts and are governed by the U.S. Bankruptcy Code. Depending on where you live in Wisconsin, these cases go through the U.S. Bankruptcy Court of the Eastern District or the Western District of Wisconsin. Individuals can file for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy allows for the discharge of debts while paying creditors through the sale of assets held by the debtor. For those who have some ability to repay their creditors, Chapter 13 allows the retention of most property while allowing more time to make payments.

Recent Changes to Federal Law

One case that established an important precedent for future bankruptcy cases was Lamar, Archer & Cofrin, LLP v. Appling, which was decided by the U.S. Supreme Court on June 4, 2018. The high court found that a false statement by a debtor about a single asset could make a debt nondischargeable. This is only true, however, if the false statement was made in writing.

Rule 3002(a) of the U.S. Bankruptcy Code was amended in 2017 to require secured creditors to file a proof of claim with the court before their claims can be allowed. A recent adjustment to Rule 3015 makes the determination of the amount and the priority of secured debts a binding determination. Finally, means testing will be used to determine whether debtors are eligible to file for Chapter 7 bankruptcy or whether they will be required to file for Chapter 13 bankruptcy plans instead.

Avoiding Bankruptcy

A Wisconsin legal team that specializes in Chapter 7 and Chapter 13 bankruptcy proceedings and debt consolidation can act as a partner in managing debts and reaching settlements with creditors. This can reduce the need for bankruptcy in some cases.

If you need help with managing debt consolidation in Wisconsin, Burr Law Office can provide you with practical solutions that suit your needs. We can negotiate with bill collectors and creditors to help you even the playing field and to achieve the best results for your situation. We can help you make the best possible decisions for yourself, your family and your future. Call us today at (262) 827-0375 to schedule a free bankruptcy evaluation. At Burr Law Office, we are here to help.

Gas Meter Utility Shutoff

Utility Shutoffs: Learning From Wisconsin Bankruptcy

It’s easy to take certain things for granted, especially when you’re preoccupied with your fight to stay ahead of debt. If you’re like many people, you might be completely unprepared for the harsher realities of life — like when your lights or heat get turned off.

Nobody should find themselves forced to go without life’s necessities, but the citizens of Wisconsin often end up in precisely such situations. Fortunately, you can file for protection, and with the right legal assistance, getting utilities after bankruptcy should be no sweat.

Bankruptcy’s Utility Advantages

Dealing with creditors often gets messy, and utilities are no exception. When the power company decides that it’s going to turn off your supply due to your nonpayment of bills, it can back you into a corner.

Filing for bankruptcy expands your options. By giving you an automatic stay that halts collections, it lets you make vital decisions without quite as much weight on your shoulders. It also offers other benefits, such as ensuring that your creditors have to go through official channels to get in touch with you — It’s much easier to negotiate with the help of a lawyer.

The protections that you receive by petitioning the court for bankruptcy don’t just exist in name. For instance, the power company is legally prohibited from turning off your electricity because you filed. They also have to give you more options for discharging what you already owe.

How Might Your Wisconsin Bankruptcy Play Out?

As countless debtors have discovered firsthand, bankruptcy cases have become regular features in the Wisconsin legal landscape. The good news is that these proceedings may shed some light on what to expect when filing and dealing with utility creditors.

For instance, the notorious Shopko bankruptcy case exemplifies the kind of back and forth that some filers face. In late May 2019, a judge threw out the company’s proposed plan to pay its debt. This development goes to show that even though bankruptcy is designed to protect the filing party, it still has to satisfy the needs of everyone else involved, including the creditors.

In all likelihood, your case will be more straightforward, but it ultimately depends on your legal team. For instance, getting utilities after bankruptcy might be harder if you fail to prove that your income falls within a range that qualifies you as a consumer experiencing a hardship situation that’s worthy of relief. Planning an argument and gathering the evidence to portray yourself in the right light is crucial to moving your case forward.

Bankruptcy may be a good option for anyone struggling to keep their lights or power on in Wisconsin. If you want to file successfully, however, you’ll need to toe the line — From meeting the filing deadlines to attending the required hearings, seeking bankruptcy takes work and a dedicated legal team.

Although getting utilities after bankruptcy is indeed possible, your experience depends on whether you can build the right legal foundation. Improve your filing odds by chatting with a member of Burr Law Office. Get a free bankruptcy evaluation, call (262) 827-0375 today.

Chapter 13 bankruptcy filing form

Learning Your Way Around Chapter 13 Bankruptcy

Having debt problems isn’t a life sentence. Unfortunately, far too many people lack the knowledge needed to extract themselves from overwhelming liabilities – It’s easy to feel lost in a labyrinth of bills.

Could seeking court-ordered financial protection help you? Here’s why so many consumers with debt problems pursue Chapter 13 bankruptcy in Milwaukee and Waukesha.

The Realities of Debt and Bankruptcy

Why do people seek bankruptcy to lift themselves out of debt? Although everyone has a unique story, there’s a common factor: Filing offers a significant debt-resolution advantage.

Receiving Chapter 13 bankruptcy protection means that the court has granted you a second chance. Instead of facing bills that you can’t settle and wondering what comes next, you can take advantage of various consumer rights, such as:

  • An automatic halt to ongoing debt collection activities,
  • Free credit counseling from government-approved experts, and
  • Help negotiating repayment plans with your creditors.

Chapter 13 isn’t there to erase bills or collection accounts as if they had never existed. Instead, it helps debtors come to terms with debt by devising a sound repayment plan. This forward-thinking option could be an ideal solution for those who want to continue their lives as normally as possible.

Chapter 13 Bankruptcy in Wisconsin

Who files for bankruptcy? Contrary to popular belief, it’s not only for people who have trouble managing their finances. This lifeline also helps those who thought they had everything under control – such as the Wisconsin farmers who filed as a reaction to losses they incurred during the US-China trade war.

Many of the bankruptcy cases you hear about in the news come packed with sensational details, such as ridiculously wealthy individuals or vanishing retailers. At its heart, however, this process is for regular people. After all, bankruptcy is written into the Constitution to help the nation’s citizens. If you build a strong case demonstrating that you’re worthy of relief, then it’s in society’s best interest for you to get the aid you need.

How to Get Informed on Whether to File for Bankruptcy

It’s not always clear when to seek Chapter 13 bankruptcy in Milwaukee and Waukesha. For instance, many people want to avoid court. Others feel torn between filing and trying to get things under control on their own.

Most debt problems only worsen with time, and you can still work to pay off your obligations while you file. Waiting to get started, however, may make it harder to deal with the whole issue cleanly.

Don’t let things pile up until they demand drastic measures. Reach out to a legal expert – Knowing how filing works could be vital to handling your debt. Call (262) 827-0375 today to find out more.

Helping Milwaukee & Waukesha Consumers Use Chapter 7 Bankruptcy

It’s time to admit it. You’ve been unable to keep up with your debts, and they’re not magically going away. As the bills mounted, you knew you needed to act, but it wasn’t clear where to turn. Now that you’ve sunk into more debt than you can handle, however, you deserve a lifeline.

Fortunately, you’re not alone: The law may be on your side, and so are the attorneys at Burr Law Office. We can help you envision a brighter financial outlook by filing for Chapter 7 bankruptcy in Milwaukee and Waukesha.

Why File for Chapter 7 Bankruptcy?

Chapter 7 bankruptcy takes its name from the section of the U.S. Bankruptcy Code that describes its rules. Although learning the law from end to end is a huge challenge, consumers can heighten their knowledge by starting with the basics:

  • Chapter 7 bankruptcies are founded on the act of liquidation — This is when your property gets sold to pay off as much of your debt as possible and get the creditors to go away for good.
  • Chapter 7 filings let you keep exempt property, such as the basic items you need to take care of your family, bank deposits up to $5,000, veterans’ benefits, unemployment compensation and professional tools.
  • Filing can help you erase many kinds of debts and halt various collection activities. It may be the right choice if you’re struggling with healthcare bills, overdue credit card fees or even court-ordered wage garnishments.
  • Although the rules require you to go through credit counseling, complete financial management classes, attend a trustee meeting and submit court fees, filing is relatively inexpensive — Most people pay less than $400 for lasting financial peace of mind.

Taking Advantage of Chapter 7 Bankruptcy in Milwaukee and Waukesha

Filing for Chapter 7 protects you by placing an automatic stay on collection activities — at least until your case has gone through the court. What’s the secret to making the most of such benefits in the short time allotted to you? It’s all about planning things thoroughly with an experienced legal advisor.

Although U.S. federal law trumps all else in determining how bankruptcy operates, Wisconsin imposes some of its own standards. For instance, your credit counseling course must be led by a state-approved provider. You’ll also have to pass a means test proving that your family income falls below the median for Wisconsin after subtracting certain approved expenses.

Being prepared is critical because the types of debts you owe might make it imperative to stick to an aggressive case schedule. Advanced planning also improves your odds of receiving permanent protection instead of just the temporary stay — If you can build a case that effectively demonstrates your hardship or lack of financial means, then the bankruptcy court is more likely to look on you favorably.

Put Your Chapter 7 Bankruptcy on Firm Ground

Get in touch with a Burr Law Office attorney. With decades of firsthand experience advocating for clients and working directly with Wisconsin’s neediest families, we’re proud to help you master the art of effective, legal debt relief. Schedule a free consultation now by calling (262) 827-0375

How to Stop Wage Garnishment Immediately in Milwaukee

What might your debt problems mean for your future? For most people, owing money is nothing new, but things can get far worse than simply having to deal with annoying creditors. You might soon discover that wage garnishment makes it harder than ever to get back to a healthy financial state.

Want to learn how to stop wage garnishment immediately? Here’s what to know about dealing with the system the right way.

Wage Garnishment Explained

Wage garnishment is when a court awards a creditor the right to take money directly from your paycheck. For instance, if you fall behind on your home loan, the bank might seek a garnishment order — Instead of paying you your full paycheck amount, your employer will have to withhold more than normal to resolve your debt.

Wage Garnishment Rules

Wage garnishment can be a tricky topic. Although there are limitations to when creditors can pursue orders, most are willing to jump the hurdles if it means they’re more likely to get their money. Some creditors, such as government entities, education lenders and child support recipients, don’t even have to get court judgments to garnish your income.

Wisconsin maintains some extra protections for debtors who find themselves in certain situations. For instance, if you took out a payday loan, then the lender can’t garnish your wages to get the money back. State law also includes exemptions for individuals and families who fall below predetermined poverty limits, and judges may make further allowances for debtors who can prove they have special circumstances or hardships.

How to Stop Wage Garnishment Immediately

What about the majority of Milwaukee debtors who don’t qualify for wage garnishment relief or exemptions? In the legal community, filing for bankruptcy is often viewed as the most viable solution.

Contrary to popular belief, bankruptcy doesn’t simply mean that you’re out of money. Instead, it’s a form of temporary legal status that carries unique rights designed to prevent people who can’t pay their debts from facing dire circumstances. One of these benefits is the right to an automatic stay.

An automatic stay is a court-ordered halt, or injunction, on debt collection actions. Most creditors can’t pursue garnishments while an injunction is in effect, and a hold lasts until your bankruptcy case gets resolved. In other words, you’ll have extra time to formulate and enact a plan.

Not all automatic stays are equivalent. For instance, Chapter 7 injunctions don’t affect wage garnishments related to child support or alimony. Although you can gain temporary relief from these obligations by filing for Chapter 13 bankruptcy, you’ll still have to come up with an agreeable plan for repaying those debts over the next 3 to 5 years.

Is Bankruptcy the Answer to Your Wage Garnishment Issues?

Filing for bankruptcy may be your best option when you want to stop a wage garnishment order immediately and recover from debt. It’s essential, however, to leverage this powerful tool correctly.

Talk to an experienced, reputable lawyer to ensure you make the right choices for a debt-free future. Get in touch to learn why so many families in Milwaukee, Waukesha, and the rest of Wisconsin entrust their financial well-being to Burr Law Office. Call (262) 827-0375 today.

How do you get a car back after repossession

Car Repossession: Getting Your Car Back

Having your car repossessed can throw everything into turmoil. When you can’t drive, it’s harder to earn income, care for your family and obtain the necessities you need to function. Even worse, you might feel like you have no other option but to sit there and take it. Repo agencies don’t mess around, and fighting back can get you into more trouble.

How do you get a car back after repossession in Wisconsin? Here’s why chatting with a legal professional about Chapter 13 bankruptcy could help and what to expect next.

Repo Basics

Repossession is when a bank, lender or the owner of your leased or borrowed item takes action to recover their property. For instance, imagine that you put your car up as collateral to get approved for a mortgage. If you missed too many payments, then your loan servicer might repossess the vehicle.

One of the critical distinctions to remember about repossession is that it puts the creditor in control — A repo agent can recover your vehicle without getting permission from a judge or having to file a lawsuit. As long as you defaulted, or failed to fulfill your obligations under an existing contract, the owner has every right to initiate a repossession.

Navigating Repossession Law

Wisconsin and other states have a few laws in place to prevent property owners from abusing the rules. Consumer protection guidelines state that parties who want to repossess vehicles need to jump through some hoops first, such as sending notifications beforehand. These laws are easy to comply with, however, so you may find them to be poor defenses against repo actions.

How do you get a car back after repossession? There are two primary options, but they may not work for everyone:

  • You can reinstate your contract by repaying everything you owe, but you’ll also have to cover the costs the creditor incurred to repo the vehicle.
  • You can redeem your contract, but you’ll have to repay the entire balance.

Reinstatement and redemption cost significant amounts of money. They may be impractical for the vast majority of Wisconsinites who couldn’t pay their loans or leases in the first place.

The Benefits of Proactively Filing for Bankruptcy

Fortunately, reinstatement and redemption aren’t your only choices. You can also seek bankruptcy protection.

When you pursue bankruptcy, you receive something called an automatic stay. This type of protection goes into effect the instant you file, and it stops creditors from taking any action to recover their property — including repossession. Although it only lasts until the court has resolved your case, it gives you the chance to chart a better course forward. If the repossession already happened, a bankruptcy judge can reverse it, and you’ll just have to pay the repo cost.

Which kind of bankruptcy is best for avoiding or halting repo actions?

Most consumers in this situation file for Chapter 13 protection. Unlike Chapter 7, which lets the court sell off your non-essential properties, Chapter 13 grants you the chance to work with your creditors. By coming to an agreement that everyone can live with, you put yourself on a less stressful financial footing.

Are you fighting a vehicle repossession in Milwaukee or Waukesha county?

Waiting around isn’t the best choice. Talk to a bankruptcy lawyer at Burr Law Office LLC to deal with your debt the smart way. Call (262) 827-0375 today.