We’ve written a series of blog posts answering questions regarding Chapter 7 bankruptcy in Wisconsin and its financial impact. Call (262) 827-0375

What Happens in Foreclosure & Bankruptcy?

When you’re having financial problems, it is likely that all of your household bills are affected, including your mortgage payments. While shelter is a basic survival requirement, you may have prioritized immediate needs like food, etc., and neglected your mortgage payments. When you fall behind on mortgage payments, your home may be foreclosed on, and suddenly, the possibility of losing your home looms large. There are ways to save your home. In this post, we’ll explore the interplay between foreclosure and bankruptcy.

Timing is crucial

Under federal law, your mortgage lender cannot officially begin foreclosure proceedings until you have missed four months of mortgage payments. Within that time period, you can take the initiative by filing for bankruptcy before any foreclosure begins. If you have received notice of your lender’s intent to begin foreclosure, you can still forestall it by filing your bankruptcy petition. Even after the foreclosure has begun, filing bankruptcy will interrupt it.

Automatic Stay

Whenever you file bankruptcy, all collection efforts of all types are automatically halted. That means that even if foreclosure proceedings have been initiated, they must be paused. This gives you valuable time to develop a strategy that may save your home. The experienced attorneys at Burr Law can negotiate on your behalf and work with your specific circumstances to preserve your most valuable assets, including your home.

Chapter 13 Bankruptcy

In Chapter 13 bankruptcy, you devise a repayment plan that will clear your secured debts over a three to five year period. This plan will include your past-due mortgage payments, and your continuing mortgage payments. Because your attorneys work with you to create the plan, it ought to be one that you can achieve. Again, the experts at Burr Law can work with your particular circumstances to help you make a realistic plan. As long as you make all of the required payments for the length of the repayment plan, you will avoid foreclosure and be able to stay in your home.

Importantly, if you have a second or third mortgage on your home, Chapter 13 bankruptcy may well serve to eliminate those debts. Typically, Chapter 13 entitles bankruptcy courts to recategorize second and third mortgages as unsecured debt. Unsecured debt receives the lowest priority in Chapter 13 bankruptcy, and usually does not have to be repaid at all.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is also known as liquidation bankruptcy. It eliminates debt completely by selling your assets. So it sounds as though it would mean that you would lose your home. However, that is not usually the case, especially if your home is your only or primary residence. There are exemptions in Chapter 7 bankruptcy, and one of the most important is your home, known as your homestead. The law in Wisconsin allows an individual filer an exemption of up to $75,000 in value in a homestead, and a couple filing together would have an exemption of $150,000. Other exemptions can also be applied to your home. The experts at Burr Law can make sure that you receive all exemptions possible.

Chapter 7 bankruptcy also forgives the homeowner for tax liability for losses the mortgage or home-improvement lender incurs as a result of the homeowner’s default. This may be debt that you have not even considered, but is important in determining which bankruptcy type to pursue. This law initially applied to the years 2007-2010, but has been extended five times and now applies to debts forgiven in the years between 2007 to 2020. Again, this is an aspect of bankruptcy that your attorneys can advise you about.

If you are concerned that your property may be foreclosed upon, or if foreclosure proceedings have already been initiated against you, contact the professionals at Burr Law. We can guide you to the best solution so you and your family can stay in your home.

Preparing to File for Bankruptcy in Wisconsin

You might think that making the decision to file for bankruptcy is the only real preparation necessary. However, whether it is Chapter 7 or Chapter 13 bankruptcy you plan to pursue, careful preparations need to be made in order for the bankruptcy code to work to your advantage. It is vital to work with bankruptcy experts (like those at Burr Law) who will guide you through the whole bankruptcy process, and that process starts well before the petition is filed in court.

Time of Filing

Chapter 7 bankruptcy is the best choice for actually getting rid of your unsecured debt. It requires a means test, though; you can’t make more than the median household income for your state. For Wisconsin, that amount is $64,168. The calculation of your household income is made from all of your income for the six months prior to the month in which you file for bankruptcy. So if there are particular times of the year when you receive money (for example, a bonus from your work or a payout from an investment) it would be wise to file for bankruptcy so that any extra income isn’t included. For instance, if you get a work bonus around the 20th of December every year, filing in December means that your household income is figured from June 1 through November 30. It is especially important to consider timing if your household income is close to the limit allowed for Chapter 7.

Credit Card Spending

When you are contemplating bankruptcy, it may be tempting to make a number of purchases on your credit cards. You may think that it is a good idea to use them while you still have them, and that it’s your final chance to buy something major. There is some truth to this thinking. No matter whether you declare bankruptcy using Chapter 7 or Chapter 13, you will no longer have access to your credit cards. However, it is important for you to know that some credit card debt can be determined nondischargeable. If you go on a spending spree just before filing bankruptcy, your credit card company can claim those were fraudulent purchases, that you never intended to repay them, and request that they be declared nondischargeable. You would need to be able to prove that you intended to repay them or that you didn’t plan to declare bankruptcy.

Presumed Fraudulence

There are some instances where the law presumes that your intent was fraudulent. If you use your credit cards in the three months before filing bankruptcy for luxury goods and services totaling more than $725, fraud is presumed (11 U.S.C. § 523(a)(2)(C)(i)(l). Likewise, If you use your credit cards for cash advances totaling more than $1,000 within 70 days before filing bankruptcy, fraud is presumed (11 U.S.C. § 523(a)(2)(C)(i)(l).

Necessary Spending

The designation of luxury goods is significant. The court will not penalize you for using your credit card for necessary expenses. So, while buying an in-home sauna would not be allowed, paying for your heating for the winter would. If you are considering taking a cash advance on your credit card in order to pay for necessary living expenses, it would be better to use your card to pay for the gas you need to get to work and the groceries to feed your family. Those expenses are easy to describe as necessary.

Bankruptcy Exemptions

Finally, Wisconsin is one of only 16 states that allows you to choose whether to use federal bankruptcy exemptions or Wisconsin state exemptions. This is an either/or choice though, you can’t choose a few Wisconsin exemptions, and mix them in with federal exemptions. The professionals at Burr Law will be able to give you the best advice for your particular situation.

When you decide to pursue bankruptcy, you need the help of experts right from the start. At Burr Law, we will be with you from the beginning—preparing to file, choosing which Chapter to use, deciding on the exemptions, and pursuing the bankruptcy through to completion.

What Happens to Your Credit Cards When You File for Bankruptcy?

When your financial situation is overwhelming, you may consider filing for bankruptcy. One of your worries might be what would happen to your credit cards should you pursue bankruptcy. That’s a legitimate concern; you may well lose access to your credit cards. Then the question becomes whether filing bankruptcy would bring more benefits than the detriment of losing your current credit cards. In this post, we’ll explore what happens with credit cards when you pursue bankruptcy.

What Kind of Debt Is it?

Credit cards are unsecured debt. Unsecured debt refers to any kind of debt that is taken on to buy everyday goods and services. Credit cards issued by banks or other financial institutions, department store cards, gas cards–all are examples of revolving credit. It is unsecured because you haven’t had to offer any kind of collateral in order to get it. Unlike your auto loan, where the vehicle itself functions as the collateral, credit card companies offer you short-term loans that you agree to repay with the stated interest. You can pay for your groceries with your credit card just like you can buy a computer with your credit card. In either case, the credit card company cannot come and take the food out of your refrigerator, or the computer off your desk. Since there is no collateral with credit cards, there can be no repossession.

Credit Card Interest

Because credit cards are actually short term loans, they charge a high rate of interest. In the first 3 months of 2022, Americans’ credit card balances reached $841 billion, and the average credit card interest rate is 21.33%. Department store interest rates are even higher. So there is a lot of money in play. If you pay your minimum amount due every month, you’re paying only the interest and are locking yourself into perpetual, costly debt. Wisconsinites have an average of $4587 on their credit cards. That means that if you want to pay off the entire amount in 6 months, you have to make monthly payments of over $800. If all of this sounds discouraging, you’re not alone.

Credit Card Debt and Chapter 7

Chapter 7 bankruptcy is called Liquidation Bankruptcy, but don’t let that name scare you off. While it is designed to repay a portion of your debts through the sale of your assets, there are exemptions, and the experts at Burr Law can make sure your car and your home remain yours. The truth is that using exemptions to their fullest, you can completely eliminate your credit card debt while keeping your most valuable possessions. There is no minimum or maximum amount of debt needed to file a Chapter 7 bankruptcy. There is an income status requirement, though. Your income needs to be equal to or below Wisconsin’s median income, $64,168. If you are close to or slightly over that number, the professionals at Burr Law can help with timing or calculation to make Chapter 7 work for you.

Credit Card Debt and Chapter 13

Chapter 13 bankruptcy functions more like a reorganization. A trustee assigned by the bankruptcy court draws up a plan whereby you repay a portion of your debts over the course of 3 to 5 years. Your creditors then need to agree to the plan, and the bankruptcy court approves it. Credit card debt is often, but not always, eliminated. Even when it is not entirely written off, you will end up having to repay only a small portion of your credit card debt. With this type of bankruptcy, you will retain your car and your house as well. There is no income status requirement, though there is a maximum debt level. To be eligible to file for Chapter 13 bankruptcy, you must have no more than $419,275 in unsecured debt and no more than $1,257,850 in secured debt, which includes mortgages and car loans.

Basically, if most (or all) of your crippling debt is credit card debt, you might find that it’s worth it to lose access to your current credit cards and get rid of that debt. The best course of action is to contact the experts at Burr Law. They can listen to your specific situation and guide you to the best decision.

Does Bankruptcy Clear Tax Debt?

If you have any tax debt and you are considering bankruptcy, it is absolutely essential that you work closely with experts in bankruptcy law and IRS regulation. It is indeed possible to eliminate tax debt when filing Chapter 7 bankruptcy, but it is not easy to do so. In this post, we will explore how bankruptcy can clear tax debt.

Criteria

You won’t be surprised to find out that IRS rules and regulations are complex, and even more so around tax debt and bankruptcy. You should expect that the IRS will object to eliminating your tax debt if it can find any reason to do so. There are a number of conditions that must be met before tax debt is eligible to be discharged through bankruptcy. Briefly they are:

  • You did not deliberately evade paying your taxes or file a fraudulent return
  • Your tax debt is at least 3 years old
  • You have filed a tax return for the 2 years prior to your bankruptcy filing
  • Your tax debt assessment can’t be over 8 months old, or not yet done

Automatic Stay

The moment that you file for bankruptcy, whether it is Chapter 7 (most commonly) or Chapter 13, all your creditors must stop harassing you for payment. That includes the IRS. The automatic stay also applies to property. So no matter what stage the IRS collection effort is in, the automatic stay stops it completely. However, an automatic stay is just a pause. If you want to eliminate IRS debt as well as other debts, choosing the right time to file for bankruptcy is crucial.

Income Taxes

Chapter 7 bankruptcy only discharges income tax debt. Your 1040 taxes are obviously income taxes, but other taxes are not. For instance, property taxes and trust fund taxes are definitely not income taxes. So the kind of taxes you owe makes all the difference. If you do owe unpaid state or federal income taxes, then debt can be discharged. Then there are some rather complicated regulations dependent on timing.

Taxes Filed for Last 2 Years

You have to have filed your taxes for at least the last 2 years (if you were required to file). At the time you file for bankruptcy, your tax returns need to be with the appropriate state tax department and with the IRS. This applies whether or not you filed those taxes on time. If you didn’t file and the IRS prepared substitute returns to determine what you owed, those do not count as taxpayer-filed returns.

Tax Debt Must Be at Least 3 Years Old

Your income tax debt must be at least three years old. And it’s crucial to remember that Tax Day is not always April 15. Some years, it could be the 16th, 17th, or even 18th. In 2020 it was July 15 because of the COVID-19 pandemic. IRS lawyers have been known to object to discharge if the timing is off even by one or two days. So, make sure you file the petition on the correct day, or else you will have to start over.

240 Day Rule

Your tax assessment can’t be more than 8 months old, or must not have been assessed yet. If the IRS has not assessed the debt within the last 240 days, the income tax debt is not dischargeable. It’s almost impossible to tell if the IRS has assessed the debt or not, because this process is an internal accounting tool. But generally, if you’ve not received a bill which breaks down the amount due by tax years, the IRS has probably not assessed the debt yet.

Burr Law Helps with Complexities

At Burr Law, our professionals have years of experience dealing with bankruptcy law. We understand the complicated IRS rules around bankruptcy, and will work with them to make sure your tax debt is included in your bankruptcy. Don’t leave something this important to chance.

Wisconsin Bankruptcy Exemptions

When you’re interested in filing for bankruptcy, there are a lot of factors to consider. Should you file Chapter 7 or Chapter 13? Or maybe even Chapter 11? Does it matter when you file? And often, most important to people is this question: Will I be able to keep my house, car, and other important personal property? The answer to that last question depends on whether or not those items are considered exempt from the bankruptcy proceedings. Because bankruptcy is nation-wide, there are certain exemptions that have been established at the federal level. Some states only allow those federal exemptions, others require you to use the state exemptions. Wisconsin is one of only 16 states that allows you to choose.

Residency Requirement

If you want to choose Wisconsin exemptions, you must have been a Wisconsin resident for about 2 ½ years. The law says that you must have lived in Wisconsin for at least 2 years, but it is not that clear-cut. If your domicile hasn’t been in the same state for over two years, the rules get more complicated. You’ll need to choose the state exemptions of the state that you lived in the longest during the 180 days immediately before the two years before filing. For example, if you plan to file on July 1, 2022, your two-and-a-half-year period would start January 1, 2019. Imagine that you were living in Iowa (for instance) on January 1, 2019 and moved to Wisconsin in May of that year. You would need to use Iowa state exemptions. If you moved to Wisconsin in March, though, you could choose to use Wisconsin exemptions or federal exemptions.

No Cherry-Picking

When deciding whether to use Wisconsin state exemptions or federal exemptions, it’s important to remember that it’s a slate of exemptions you’re choosing. You must accept all the exemptions in whichever slate you’ve gone with; you can’t pick a few from the Wisconsin list, and a few from the federal list to create the most advantageous situation for you. Given that fact, it’s wise to have one of the experts at Burr Law examine your particular situation to determine which set of exemptions most suits your needs.

What Are The Wisconsin Exemptions?

The most relevant Wisconsin exemptions are for your home, car, tools of your trade, and personal property. The homestead exemption in Wisconsin is $75,000 of the equity in the home, or $150,000 for joint filers. That compares to the federal exemption of $25,150 or $50,300 for joint filers. The exemption for your car is $4,000 (plus any unused portion of the $12,000 allowed for your personal property). Any tools of your trade (like business equipment, inventory, or actual tools) are at $15,000 compared to $2,525 for the federal exemption. Your personal property is exempt too, up to $12,000, as are your bank deposits up to $5,000. College savings accounts or tuition trust funds will not be touched. Only some retirement accounts apply, though. It really requires professional analysis to make the best choice.

Federal Nonbankruptcy Exemptions

The federal nonbankruptcy exemptions are federal exemption laws that exist outside of the Bankruptcy Code and protect property from creditors whether or not a bankruptcy case has been filed. By contrast, federal bankruptcy exemptions are listed in the Bankruptcy Code and provide protection only in a bankruptcy proceeding. If you are using Wisconsin state exemptions, you can still use the federal nonbankruptcy exemptions as a supplement for additional protection of your property, assuming you qualify for them. The qualifications vary, and the experts at Burr Law will be able to guide you in evaluating whether you can benefit from them. These federal nonbankruptcy exemptions include retirement benefits, death and disability benefits, survivor’s benefits, and other miscellaneous exemptions. Each has its own qualifications.

If you are filing for bankruptcy in the state of Wisconsin, you are fortunate to be able to decide whether the Wisconsin state exemptions or the federal exemptions will better protect your assets. The professionals at Burr Law have extensive experience in working with the exemptions, and will talk you through your options.

How Much Debt Do You Need to File Chapter 7?

When you’re in financial distress, you may begin to consider your bankruptcy options. Maybe you’ve heard that Chapter 7 completely eliminates all unsecured debt and leaves you free to rebuild. That’s true. You may be wondering whether your kind or quantity of debt is allowed in Chapter 7 bankruptcy. Well, the good news is that there is no minimum or maximum amount of debt in order to file for Chapter 7.

Eligibility Is Means Tested

Chapter 7 bankruptcy is means tested. The income limit is the median household income for your particular state, and you need to be at or below that amount in order to file Chapter 7. For Wisconsin, the median household income is $64,168. Your median household income is calculated using the average gross monthly income that you had for the six months prior to you filing Chapter 7 bankruptcy. If your circumstances suggest that you may be close to that amount, then it is likely that expert advice can help you meet the requirement. The professionals at Burr Law can help determine your eligibility for Chapter 7.

Chapter 7 Ends Collection Actions

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. That’s true with all bankruptcy filings, including Chapter 7.

Chapter 7 Eliminates Unsecured Debt

Unsecured debt describes money you have gotten without putting down any collateral. So it applies to all credit card debt, for instance. With Chapter 7 Bankruptcy, you don’t need to worry about any sort of repayment for your credit card debt, medical debt, and other unsecured debt. The entire process takes between 3 to 6 months, and then your debt has disappeared. Your debts are cleared, once and for all.

You Are Not Alone

Often unspoken, the negative impact on your mental health when you have significant financial issues is undeniable. Filing for bankruptcy shifts all of that stress and tension. Instead of facing your money problems alone (or trying to ignore them), you will be working with professionals dedicated to helping people in your situation. Over 6000 Wisconsinites declared bankruptcy in the first 8 months of 2021, and 75% of them were Chapter 7 filings. The experts at Burr Law can guide you through the process step by step, and you can breathe a sigh of relief.

Bankruptcy can give you a clean slate, though it is not without difficulties and dangers. If you are considering bankruptcy, it is vital that you consult with experts. There is no minimum or maximum amount of debt that you need in order to file Chapter 7 bankruptcy. The process is complicated, though, and the professionals at Burr Law can evaluate your particular circumstances and advise you on the best way forward.

Does Bankruptcy Prevent Utility Shutoff?

When your financial situation is overwhelming, it can happen that you fall behind on your regular bills, like utility payments. Being threatened with having your power cut off is really disturbing, and it may prompt you to think about the different ways you can deal with your money troubles. One thing that undoubtedly comes to mind is bankruptcy. Bankruptcy is a way of eliminating unsecured debt, and back utility bills fall into that category. If you are overdue on utility bills and are in danger of a shutoff, filing for Chapter 7 or Chapter 13 bankruptcy creates a bankruptcy stay that prohibits this shutoff for gas and electric. There are specific steps you need to take, though, in order for the power to remain on.

How It Works

As soon as you file a petition to begin the bankruptcy process, your utilities cannot be shut off for 20 days. It’s best if you complete all the bankruptcy paperwork at the same time that you submit the petition, but if you can’t, then be sure to do it within 14 days. That 20 day utility shutoff prevention period gives you almost 3 weeks of breathing room, and the professionals at Burr Law will be there to help you strategize your next moves.

What Happens With Your Utilities

The utility company (WE Energies) will send you a deposit letter approximately 20 days after filing the bankruptcy petition. You are required to pay this deposit. This is really important! If you do not pay it, then the utility company will shut you off. You need to pay the deposit and pay your gas and electric bill on time and in full for the next twelve months. These are the bills for the monthly usage, not the past due amounts. At the end of that 12 month period, the utility company will refund your deposit with interest.

Past Due Amounts Eliminated

A Chapter 7 bankruptcy takes anywhere from 3 to 6 months and at the end of it, all your unsecured debts will be discharged. That means that any past due amounts you owe to your utility company will be completely discharged (along with credit card debt, medical debt, and other unsecured debts). So bankruptcy will definitely prevent your utilities from being cut off for 20 days, and it can provide you a way to get rid of the debt you owe entirely.

Should You File or Not

Filing for bankruptcy is a big decision and if your primary concern is your utility bills, it is likely that a less radical solution can be found. When you have mounting medical debt, credit card debt, and other obligations along with your utility bills, then bankruptcy may be your best option. You can always consult with the professionals at Burr Law to clarify your situation.

If you are worried about your utilities being shut off, or feeling overwhelmed with financial difficulties, contact the professionals at Burr Law. You don’t need to struggle through it alone. We’re here to help.

Bankruptcy and Divorce

Divorce and bankruptcy are both extraordinarily difficult and stressful situations to experience; doing so at the same time is even more complicated. Aside from the emotional strain, there are some very pragmatic factors that must be considered. In this post, we will explore the implications of divorce on bankruptcy.

Amicable or Acrimonious?

Before factoring in any of the financial or logistical matters, you must evaluate honestly the state of your relationship with your (soon to be ex) spouse. If you’re on amicable terms with your spouse, then filing for bankruptcy before a divorce could be a viable option. However, attempting to file bankruptcy with a spouse who is hostile to your financial interests could actually cause more harm than good. You will need to depend on your spouse to show up to court and provide all necessary financial documents, and you need to be confident that they will work with you and your attorney.

Chapter 7 Bankruptcy

Whether or not divorce is involved, deciding on what kind of bankruptcy to file is key. Chapter 7 bankruptcy is often chosen because it can be completed within four to six months and completely eliminates unsecured debt. However, in order to file for Chapter 7 bankruptcy, your income must be equal or below the median household income for your state. For Wisconsin, that’s $67,094 (as of 2020). If you and your spouse remain friendly, and you can file for Chapter 7 bankruptcy, then filing it before your divorce may be the best option. You can file jointly, discharge your debts, then divorce afterwards.

Chapter 13 Bankruptcy

If your income level is too high to qualify for Chapter 7 bankruptcy, you may file Chapter 13 bankruptcy. Chapter 13 functions more like a court-administered reorganization and it lasts from three to five years. If you divorce during that time, you will still be obligated to make the repayments ordered. If you and your spouse are friendly, perhaps you can agree on the portion of the repayment you will each do. If not, you may need to go through the process of having the bankruptcy case bifurcated. That may make the most sense; it’s possible that you may then be able to convert to a Chapter 7 bankruptcy.

Bankruptcy Costs

If you and your spouse file a joint bankruptcy you’ll save money on filing fees and the cost of hiring a lawyer. However, since your household income will be determined by what both you and your spouse earn, filing bankruptcy before your divorce could mean that your income is too high for Chapter 7 bankruptcy. In that case, divorcing first and then filing for bankruptcy would be the best idea.

Assets

Filing for bankruptcy jointly with your spouse brings advantages. One of the experts at Burr Law can help you understand how your assets will be protected. This applies, especially, to things you own jointly like your house or your vehicles. And depending on the jurisdiction you live in, filing a joint bankruptcy with your spouse could give you extra protection in the form of double exemptions. For example, if your home value is exempt up to $100,000 for a single bankruptcy filer, depending on the law in your jurisdiction, filing jointly could give you a bonus exemption making the house exempt for up to $200,000.

Bankruptcy and divorce are both unpleasant things that happen sometimes. Taking a pragmatic and rational approach to your situation is the best way to mitigate it. Contact the professionals at Burr Law to explore your options.

What Is The Income Limit For Chapter 7 In Wisconsin?

When you’re in financial distress, you may begin to consider your bankruptcy options. Maybe you’ve heard that Chapter 7 completely eliminates all unsecured debt and leaves you free to rebuild. That’s true. You may also have heard that it is only available to some people, that there’s an income limit that you cannot cross. Chapter 7 bankruptcy is, indeed, means tested. In this post, we will explore what the income limit is for those who want to file Chapter 7 bankruptcy in the state of Wisconsin, and the factors that go into calculating that figure.

Income Matters

In order to file Chapter 7 bankruptcy, you cannot have an income above the median household income of your state. For Wisconsin, that amount is $61,747, based on 2019 figures. The 2020 figures ought to have been made available by the U.S. Census Bureau in September of 2021, but the release of that data has been delayed.
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. If your income is greater than $61,747, there still may be a way for you to qualify for 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 in December. 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. So it is important to determine the best time to file for Chapter 7 bankruptcy. The date of filing should be carefully considered; you want it to work in your favor for the means testing.

Categorization Matters

You probably don’t consider yourself a business; but it may be possible to file Chapter 7 bankruptcy as a business and therefore avoid the means test. A business filing Chapter 7 does not have to meet the means test. So how could you, as an individual, qualify as a business? Personal tax debt and student loan obligations are usually considered business debt. People with large balances might qualify as an individual filing for a business bankruptcy and avoid taking the means test. If you’re interested in pursuing this possibility, you should definitely consult with the experts at Burr Law.

Deductions Matter

Deductions can also factor into the determination of your income for the means test.
Here are some of the most common obligations you can deduct from your actual expenses on the means test: Secured debts (like your car or mortgage); Insurance (health, disability or term life insurance); Taxes; Involuntary deductions (like union dues, uniform costs, or mandatory retirement plans); Child care; Court-ordered Payments (alimony or child support); and Familial obligations (like expenses associated with a disabled child; care of an elderly, chronically ill or disabled family member, etc.). Even charitable contributions can be deducted if you can demonstrate that they have been regularly made prior to filing. The professionals at Burr Law can guide you through what expenses can be deducted.

The means test for Chapter 7 bankruptcy may seem straightforward and rigid, but there is more flexibility than first appears. If you are contemplating bankruptcy, it would be wise to consult the experts at Burr Law.

How Long Does Bankruptcy Take in Wisconsin?

When your financial situation is dire, you’re looking for solutions, and you need them quickly. You might think that the bankruptcy process is just too long and cumbersome to provide the kind of relief you need right away. While there are a number of steps that you need to go through, that doesn’t necessarily mean that it will take an extremely long time. In this post, we will examine just how long bankruptcy takes in Wisconsin.

Two Kinds of Bankruptcy

The first thing you should know is that there are generally two different kinds of bankruptcy that individuals can pursue, Chapter 7 and Chapter 13. The actual bankruptcy process through bankruptcy court for both takes approximately four to six months. For Chapter 7 bankruptcy, that’s it finished; your unsecured debt is eliminated. For Chapter 13 bankruptcy, you enter into an agreement that runs over three to five years where a portion of your debts are repaid.

Credit Counseling

Whether you are filing Chapter 7 or Chapter 13 bankruptcy, the bankruptcy court process is the same. It begins with pre-filing credit counseling. This seminar usually lasts between 60 and 90 minutes and is required before you actually file in the bankruptcy court. There is also a post-filing course that you are required to complete successfully. The word “course” here is a bit misleading. In Wisconsin, there are approximately 85 courses approved by the US Trustee, and they range in price and duration. Some of them are as short as 2 hours.

341 Meeting

A 341 meeting must take place within 3 to 7 weeks after filing. At a 341 Meeting you meet with the Trustee appointed to oversee the case. The Trustee checks your identification and asks you a series of questions about the bankruptcy paperwork. The Trustee’s job is to check your identity, review your paperwork for accuracy, and make sure that your creditors get paid as much as possible. Creditors who attend can ask about financial matters, although it’s rare for creditors to appear. The whole thing usually lasts about 10 minutes; if there are creditors present or the inquiry seems to be taking longer, another date will be set to conclude the meeting.

Differences in 341 Meeting

The Trustee in Chapter 7 and Chapter 13 has different duties. The Chapter 7 Trustee will sell any assets that you can’t protect with a bankruptcy exemption and distribute the proceeds to creditors. The experts at Burr Law can help you preserve your assets. For instance, you’ll almost certainly retain your car and house. The Chapter 13 Trustee will evaluate the workability of your proposed Chapter 13 repayment plan. If the judge approves the plan at the Confirmation Hearing (which follows), the Chapter 13 Trustee will continue to distribute monthly payments to creditors. (Debtors begin making the proposed plan payments about 30 days after filing and receive the funds back if the court doesn’t confirm the plan, with some exceptions.)

Confirmation Hearing for Chapter 13 Bankruptcy

If you are pursuing Chapter 13 bankruptcy, there will be a Confirmation Hearing within 45 days of the 341 Meeting. In Wisconsin, it is not usually necessary for you to appear at this hearing; only your attorney needs to do so. If there are other issues, the Confirmation Hearing can be continued (delayed) either at the request of a creditor or your request. A Continuance can be granted multiple times.

Discharge

For Chapter 7 bankruptcy, the Discharge happens between 60 and 90 days after the 341 Meeting. For Chapter 13 bankruptcy, the Discharge does not occur until the repayment plan (usually three to five years) is completed.

Bankruptcy is complex, but doesn’t have to be lengthy. The experts at Burr Law can guide you through the process so that you meet all deadlines and emerge into a financial future that is much less stressful.