Consumer advocates of Wisconsin

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Chapter 13

Reorganization

Consumers can reorganize their debts under Chapter 13 of the U.S. Bankruptcy Code.  When consumers file a Chapter 13 plan, all of their debt is included and addressed in some way.  Here are some ways that filing a Chapter 13 can help you:


  • Consumers who are ineligible for a Chapter 7 are often eligible for a Chapter 13.  
  • An individual who completes a Chapter 13 may be eligible for a discharge similar to the discharge available through Chapter 7.
  • The "automatic stay" is a powerful legal tool that protects individuals who are in an active Chapter 13 repayment plan.  During that time, creditors are prohibited from any and all collection activity, including phone calls, law suites, garnishment, foreclosure, and repossession.
  • Most Chapter 13 plans do not require full payment of all existing debt.  Depending on certain factors,  you may be only a fraction of  your credit cards, medical bills, loans and more, interest free!  


For more information on how a Chapter 13 can help you, contact us to schedule a free consultation.  




Chapter 7 

 Liquidation

The ability to file a petition under Chapter 7 of the U.S. Bankruptcy Code is one of the most powerful remedies available to consumers.  Often, the goal of filing a Chapter 7 petition is to obtain a "discharge."  A discharge order legally eliminates debt.  Here are some important things to know about Chapter 7 when considering whether filing bankruptcy is right for you:


  • Not all debt is dischargeable.  There are many different types of debts that Congress has excepted from discharge, and there are many often complicated rules that must be applied to determine whether a particular debt is dischargeable.
  • Before filing a Chapter 7 petition, it is important to consult an attorney about "exemption planning."  Exemption planning is the process of reviewing the value of your assets, including your home, vehicles, financial accounts, businesses, and anything else you own, to determine whether you are able to protect all of your assets.  When an asset cannot be protected or exempted, that asset may be sold to repay your debt.
  • There are restrictions on who may file a Chapter 7 and receive a discharge.  One of the most important restrictions is income based. To determine whether you are eligible for Chapter 7 relief, it is important to conduct a detailed analysis of your financial affairs before filing your case.
  • Individuals who file bankruptcy are required to take two classes.  The first class, "credit counseling," must be completed before your case is filed.  The second class, "financial management," must be taken after you file your case but before you are eligible to receive your discharge.  
  • Everyone's financial situation is different.  In order to determine what you have to gain, or potentially lose, by filing Chapter 7, it is of vital importance that you consult with an attorney before filing your case.


Why do you need an attorney?

In addition to the reasons stated above, here are some other important issues that may arise in a Chapter 7 case and that should be reviewed by an attorney before filing your case:


  • Sometimes consumers have certain debts like mortgages and car notes that they want to keep as is.  To do this, there are steps you must take in your bankruptcy case to "reaffirm" the debt.  Consumers often do this so they have a way to build credit after receiving a discharge and because they want to keep certain assets like a home or car.
  • Drafting your Chapter 7 is an extremely technical and specialized process.  The documents that must be filed in your case often total more than 50 pages.  Thus, it is important to hire an attorney who is experienced with Chapter 7 cases to that your may be properly advised of how Chapter 7 while affect you and to make sure your documents are completed correctly.
  • Making a mistake can cost you money.  If your Chapter 7 case is dismissed, you will not be able to get a discharge unless you file a new case.  Starting from scratch can be frustrating and expensive, which is why it is important to get it right the first time.