What To Expect When Filling for chapter 7

While Chapter 7 bankruptcy may seem like an easy way out of debt, the process can be complicated and emotionally draining. But this shouldn’t scare you, as Chapter 7 will eliminate most of your debts and give you a chance to start afresh. The initial step is to get hold of a bankruptcy attorney who will help walk you through the legal process.

What is Chapter 7 Bankruptcy?

Also called liquidation bankruptcy, Chapter 7 allows you to eliminate most of the debts you owe. The court forgives or discharges the debts and gives you a fresh start. However, it’s worth noting that Chapter 7 does not discharge tax debt, child support, student loans, and alimony.

How Does Chapter 7 Bankruptcy Work?

If you are struggling with your finances, Chapter 7 may be a “second chance” to help you reset your finances. It can eliminate most of your debts, meaning that you won’t have to pay for them. Most cases involved are “no-asset” cases, so you don’t have to worry about your belongings.

Once you’ve filed for chapter 7, here’s how it works:
• A temporary stay is put on your debts by the court. The stay can help stop wage garnishment, debt collection efforts, property repossession, and home foreclosure.
• The appointed trustees sell certain properties. The custodian reviews your finances and keeps an eye on your chapter 7. They can then sell nonexempt property (nonexempt property is chattel that the court does not allow you to keep). The proceeds obtained are used to pay your creditors.
• You are allowed to keep exempt property. You can rest assured that you won’t have to sell everything. However, the list of exempt properties, plus the amount you can exempt, varies from one state to the other.
• The court discharges the remaining debt.

Dischargeable debt under Chapter 7 are:
• Utility bills
• Medical bills
• Social Security overpayments
• Collection agency accounts
• Mortgage loans that you are not able to pay
• Veteran’s assistance loans
• Credit card balances, including late fees and overdue
• Civil court judgment

Non-dischargeable debts include:
• Secured debts
• Alimony
• Child support
• Tax liens
• Personal injury debt
• Student loan

Who qualifies for Chapter 7 Bankruptcy?

When filing for Chapter 7, there are several requirements you need to meet.

Income Counselling

To qualify for Chapter 7, you must pass a bankruptcy means test, which determines if an individual’s disposable income is enough and can be used to make partial payments to unsecured debt. If you fail the test, you can still file for Chapter 13.

No Fraud

If the court finds out that you are attempting to defraud your creditors, it may dismiss your case – for instance, taking a loan and declaring bankruptcy not to repay it.

Credit Counselling

You must finish a credit counseling course, usually within 180 days before filing.

When to File for Chapter 7

Filing for bankruptcy may be the right decision, but it’s important to understand that it will significantly affect your financial future for a few years. So, it’s crucial not to rush into it.

According to Sumeet Sinha, the founder and CEO of finpins.com, a personal finance blog and educational resource, there is a common misconception that individuals and couples should immediately file for Chapter 7 bankruptcy when they face financial difficulties. However, exploring this option is advisable only when creditors are harassing you, experiencing wage garnishment and bank account seizures, and have no other means of repaying your debts.

The Chapter 7 Bankruptcy Process in Wisconsin

Once you’ve decided to file for Chapter 7 bankruptcy in Wisconsin, here’s what you can expect in the process:

First, you’ll meet with a bankruptcy attorney for a free initial consultation. During this meeting, you must provide details about your assets, debts, income, and ongoing legal actions or foreclosures. The attorney will review the situation and determine if you qualify for Chapter 7 based on income limits and means testing. If you qualify, you’ll discuss fees and agree to proceed.

Next, your attorney will prepare and file your bankruptcy petition in federal bankruptcy court. This includes providing schedules that list your assets, income, debts, and expenses. As soon as the petition is filed, an automatic stay goes into effect, which stops collection calls and lawsuits against you.

About a month after filing, you’ll attend a meeting known as 34. This meeting involves the bankruptcy trustee and your creditors. The trustee will ask you questions under oath to review your petition.

If the trustee finds no issue during the 341 meeting, you can expect to receive a discharge in approximately three months. The discharge eliminates most of your debts and prevents creditors from collecting. However, it’s important to note that certain debts, such as student loans and child support, are not charged.

The entire process usually takes between 3 to 6 months. While it can be a stressful experience, filing for bankruptcy offers a fresh start and relief from overwhelming debt. With the guidance of an experienced bankruptcy attorney, you can navigate the process smoothly and emerge debt-free.

To find an attorney, search online for “Chapter 7 bankruptcy Milwaukee” or “Chapter 7 bankruptcy lawyers near me.” Reading reviews from previous clients to gauge their experience, expertise, and approach is a good idea. Most attorneys offer free initial consultations, so meeting with a few is beneficial to finding someone you feel comfortable with.

What to Avoid Before Filing Chapter 7?

• Don’t pay creditors
• No new debt
• No unusual transactions

Life After Chapter 7

Life after chapter 7 can be a fresh start. While the process can be difficult, once your discharge is granted, a huge weight will be lifted off your shoulders.
• Your debts are discharged
• Your credit score may drop temporarily
• You may qualify for loans again


It’s important to note that filing for bankruptcy will temporarily lower your credit score. Chapter bankruptcy will remain on your credit report for up to 10 years. However, the impact on your credit score lessens over time. You can rebuild your credit immediately by using your credit card responsibly and paying bills on time. Regularly checking your credit report and disputing any errors will also help.

Contrary to popular belief, you can qualify for house auto loans shortly after bankruptcy. Initially, you may face higher interest rates, but with time and a good payment history, your credit score will improve, providing more options.

With discipline and time, you can rebound from bankruptcy stronger and wiser. The fresh start you’ve been given is a chance to build good financial habits and secure a stable financial future.