Wisconsin lies on the higher end of bankruptcies per capita, ranking 17th in the United States as of 2007. These numbers have been increasing across the country due to the suffering economy and increasing consumer credit purchasing. Because of these changes, the federal regulations for bankruptcy have required considerable updating by each respective state in the country. Each method still holds varying benefits for each situation, and the general process remains the same.
Finding a Bankruptcy Attorney
Before filing for bankruptcy or even choosing which type is best, a specialized bankruptcy attorney should be consulted. With the ability to accurately assess financial circumstances, they prove to be invaluable during the bankruptcy process. Because of this, choosing one should not be taken lightly. There are many online services for assistance, but most often personal or business referrals yield the most favourable results. Though there are only three most common forms of bankruptcy, Chapter 7, 11 and 13, these attorneys are beneficial for the rest of the bankruptcy process too.
Bankruptcy Options
Inevitably, the best option for most individuals will be Chapter 7, but each those three most common options holds their own particular benefits:
- Chapter 7 is the most popular because it removes the majority of a debtors debts, paying creditors with the liquidation proceeds, and because of exemption regulations that leave debtors with enough to start fresh. This is often called liquidation bankruptcy.
- Chapter 13 is somewhat of a precursor to Chapter 7, as no possessions are taken, but the debtor also keeps all of their debt. The benefit is in its rehabilitation through the organization of finances and planned repayment of debts over three to five years.
- Chapter 11 involves a process very similar to that of Chapter 13, but it is formatted for use by businesses, rather than individuals. It allows for continued operation within the business to generate revenue for repayment.
Wisconsin Exemptions
As in many other states, Wisconsin allows those filing for Chapter 7 bankruptcy to choose either from the federally exempted items, or from the Wisconsin state specific exemption list, which contains the following:
|
Homestead |
up to $40,000 |
|
Wages |
up to 75% earned but unpaid |
|
Personal Property |
Household goods including animals and firearms to $5,000, motor vehicles to $1,200, personal injury recoveries to $25,000, wrongful death recoveries |
|
Pensions |
Public and municipal employees, fire fighters or police officers(in cities of over 100,000) |
|
Public Benefits |
Crime victims, worker’s, unemployment, veteran’s, social security, disabled general assistance |
|
Tools of the Trade |
Any single trade equipment items up to $7,500. |
|
Insurance |
Federal disability, life to $5,000(if beneficiary is a married woman), Unmatured life insurance to $4,000 |
|
Miscellaneous |
Burial provisions, health aids, child support and alimony |
Filing the Petition
Even before filing a petition to the bankruptcy court, those who are attempting Chapter 7 bankruptcy must pass a “means test” to be eligible for it. If passed an inventory of their possessions must be taken. A precise inventory is vital to avoid possible bankruptcy fraud. Filed petitions are usually answered within 20 to 40 days, and if successful, creditors will be contacted to schedule the “341 meeting” with a bankruptcy trustee and all creditors. For those filing for Chapter 13 bankruptcy this is the most important step, because it is when the actual repayment plan is designed.
