Do you need relief from endless phone calls from bill collectors? Are you worried about losing your home to foreclosure? Bankruptcy may be able to help.
Bankruptcy is a federal law that allows you to manage, and in some cases, eliminate, your debts. Individuals filing for bankruptcy in Wisconsin may choose either a Chapter 7 or Chapter 13 bankruptcy. In a Chapter 7 bankruptcy, you surrender your non-exempt assets to a bankruptcy trustee who sells them to make payments to your creditors. Alternatively, in a Chapter 13 bankruptcy, you may usually keep all of your property but you deposit your disposable income with a trustee who distributes payments to your creditors under a court-approved plan. In either case, being a Wisconsin resident impacts your bankruptcy filing.
Where Are Bankruptcy Cases Filed?
Wisconsin has two bankruptcy courts: the Western District of Wisconsin in Madison and Eau Claire, and the Eastern District of Wisconsin in Milwaukee. Your place of residence determines the court where your bankruptcy case should be filed.
Chapter 7 Bankruptcy Eligibility Requirements
If your average monthly income is less than Wisconsin's median income, you are eligible to file a Chapter 7 bankruptcy. However, if your average monthly income is greater than or equal to Wisconsin's median income, it is presumed that you have the ability to repay at least a portion of your debts so you're ineligible to file Chapter 7 unless you pass a stringent means test.
How Long Does a Chapter 13 Plan Last?
For individuals with an average monthly income less than Wisconsin's median income, the maximum length for a Chapter 13 plan is 36 months, unless the bankruptcy court finds good cause to extend it to a maximum of 60 months. For individuals with an average monthly income that equals or exceeds Wisconsin's median income, the Chapter 13 plan lasts a maximum of 60 months.
Appearing in Court
In many bankruptcy cases, you will be required to meet with your case trustee to answer questions about your finances. Your creditors may also appear to ask questions at this meeting.
Exemptions allow you to exclude property from your bankruptcy. Wisconsin residents may elect to claim the exemptions under either federal bankruptcy law or Wisconsin state law, but not both. Federal bankruptcy exemptions allow you to protect a portion of the equity in your home and automobile, some household and personal items, and a small “wild card” exemption that allows you to protect your interest in any property, including cash.
Wisconsin bankruptcy exemptions include:
- Homestead up to $75,000 per spouse
- Personal injury claims up to $50,000
- Household furnishings, appliances, clothing, jewelry, books, firearms and sporting goods, and other similar household goods up to a maximum of $12,000
- One motor vehicle up to $4,000, plus any unused amount of the household good exemptions
- Personal bank accounts up to $5,000
- Certain insurance and annuity policies
- Alimony and support payments
Generally, each spouse in Wisconsin is entitled to claim the exemption, which results in a married couple having a double exemption for each item.
Regardless of whether you elect the Wisconsin or federal bankruptcy exemptions, you may also take advantage of federal non-bankruptcy exemptions, which protect your interest in tax-exempt retirement plans, IRAs, and social security benefits.
A Bankruptcy Attorney Can Help
For specific information regarding your situation and what actions you need to take, please contact a Wisconsin bankruptcy lawyer.