8 Things You MUST Know Before Filing for Bankruptcy in Wisconsin
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If you're overwhelmed by out of control debts and creditors calling about past-due bills, filing for bankruptcy becomes a real possibility.
Before filing bankruptcy, understand the types of bankruptcies you can file, and how Wisconsin bankruptcy laws apply to your case.
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Filing for Chapter 7 or Chapter 13 bankruptcy in Wisconsin incurs a different filing fee with the Bankruptcy Court.
( 2 )
Filing for bankruptcy by yourself is not a good idea. You need counseling from a legal expert to guide you through the filing process.
( 3 )
Understand the differences and similarities of Chapter 7 and Chapter 13 bankruptcy to determine how you qualify.
( 4 )
Filing for Chapter 7 or Chapter 13 bankruptcy helps you discharge common types of debt, but cannot get rid of all of them.
( 5 )
Obtaining credit for a home or car loan will be more difficult after declaring bankruptcy. You must know the consequences before filing.
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Depending on your annual household income, you may be eligible to file for Chapter 7 debt liquidation.
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Using exemption laws properly can prevent the sale of your property to pay your creditors.
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How often you can file depends on the type of bankruptcy you're filing and the time passed since your last discharge.
1. How much does it cost to file bankruptcy in Wisconsin?
You may be able to pay bankruptcy filing fees in installments.
In Wisconsin in 2022 it costs $335 to file for Chapter 7 bankruptcy and $310 to file for Chapter 13 bankruptcy. The cost to declare bankruptcy in Wisconsin is the same for an individual or a married couple. If you can’t pay the filing fee all at once, the court may allow you to make installments.
Bankruptcy filing fees are completely non-refundable.
2. Filing bankruptcy in Wisconsin without a lawyer
Errors or omissions on critical bankruptcy forms could lead to a loss of assets. You need professional advice!
You might wonder: Why can't I just file for bankruptcy myself?
Filing for bankruptcy on your own is called “pro se” filing (a Latin word meaning "for oneself"). This is a wise way to go about declaring bankruptcy. It's time-consuming and costly to learn bankruptcy law on the fly. The possibility of losing valuable assets is always on the table.
Still, you're within your legal rights to file for bankruptcy without a lawyer. Legally speaking, there is no requirement for a personal bankruptcy lawyer. But by filing alone, you're exposed to serious risk of losing assets or having your case dismissed entirely.
Here’s Why You Need a Bankruptcy Attorney:
- We can help you qualify for Chapter 7 when you thought you couldn't
- Have legal representation in meetings with creditors. By law, only a licensed attorney may provide this service
- Filing for Chapter 7 improperly may force you to file for Chapter 13 and pay a percentage of your unsecured debts
- Filing for Chapter 7 improperly may also force you to lose assets you don't know how to protect
- You'll need help correctly filling out the blizzard of forms and paperwork
- To meet deadlines. Missing a deadline could mean delaying or dismissing your case
Hiring a Bankruptcy Petition Preparer (BPP) is NOT a Solution
Pro se filers often hire a BPP instead of a lawyer. The BPP may tell you to pay them a $75.00 and it will be easy to waive the Bankruptcy Court’s $335.00 filing fee. This is often not the case and can eventually result in a dismissal of your bankruptcy filing. A BPP can’t even provide legal advice if problems arise.
Let there be no doubt—a bankruptcy petition preparer is nothing more than a typist who, by law, can't be a legal consultant. It's not worth your time or money. Learn more about the risks and responsibilities of filing bankruptcy in Wisconsin without a lawyer and book a free consultation with us today.
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3. What's the difference between Chapter 7 & Chapter 13 bankruptcy?
Chapter 7 and Chapter 13 bankruptcy share a few similarities. Both personal bankruptcy options are available to individuals, and both offer you the opportunity to discharge certain debts. Both options immediately impose an automatic stay to keep creditors from taking further action against you, giving you protection during the filing process.
Here’s the primary distinction: Chapter 7 bankruptcy is a liquidation of debts, and Chapter 13 is a reorganization of debts.
Chapter 7 vs. Chapter 13 Bankruptcy
Chapter 7 Bankruptcy
Filing for Chapter 7 bankruptcy can discharge certain unsecured debts with no attachment to property. You are not required to pay down these debts. Under certain circumstances, secured debts such as car loans and home mortgages can be discharged if you no longer wish to keep the property.
Chapter 7 bankruptcy is a fairly fast process and lasts about 110 days on average. Chapter 7 can be a very effective option for people with lower incomes to get creditors off their back and begin to rebuild a solid financial foundation.
In order to qualify for chapter 7 bankruptcy you'll need to complete a means test, which examines the last six months of your financial history. There are a number of strategies that may help you qualify for chapter 7 rather than chapter 13. An experienced bankruptcy attorney can be invaluable in helping you make an informed decision.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy handles unsecured debts somewhat differently. Although, unsecured debts will still be discharged at the end of your plan, it is usually necessary to repay a small percentage of these debts during your plan. How much of your debt should you expect to pay? It depends on the amount of disposable income you can dedicate towards a 3-5 year repayment plan.
Determining how much disposable income you have is a very important topic that we’ll discuss when we meet. Chapter 13 is an appropriate option for people with a regular source of income. Chapter 13 can work well if you have missed payments on a home or a car and want to get caught up with these debts and keep the property.
Chapter 13 can also be a good option for people who earn too much money to qualify for Chapter 7 but need help reorganizing their burden of debt.
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4. Dischargeable and nondischargeable debts in bankruptcy
Contact a bankruptcy lawyer to find out which of your debts you can discharge in bankruptcy.
In bankruptcy, the term discharge is defined as: a permanent order of the court that releases you from the legal obligation to pay certain debts. Claiming bankruptcy in Milwaukee can relieve you of most general unsecured nonpriority debts.
Bankruptcy Can Discharge the Following Debts
Debts You CANNOT Discharge in Bankruptcy
- Some income taxes*
- Child support/alimony
- Student loans**
- Municipal fines
- Criminal fines
- Traffic fines
*'Some income taxes' can be discharged and some cannot. So can you include IRS debt in Chapter 7?
Only income taxes can be discharged in bankruptcy, and there are certain qualifications for discharging income tax debt through bankruptcy. Contact Milwaukee bankruptcy attorney Steven R. McDonald for a free consultation to learn if you qualify.
**Student loans are almost always nondischargeable. It is important to understand that the discharge of student loan debt through bankruptcy is so difficult to obtain, and happens so rarely, it’s hardly worth addressing.
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5. How long bankruptcy stays on your credit report
Get your questions about bankruptcy and your credit report answered during your free bankruptcy consultation.
The fact that you filed a claim for bankruptcy will remain on your credit report for ten years. Obtaining credit for a mortgage, a car loan or a credit card will be more difficult if you’ve recently filed for bankruptcy. Your credit score can improve in a few short years by paying your bills as they become due and limiting the amount of credit that you obtain.
Filing for bankruptcy does not wipe your credit report clean. There can be long-term consequences for doing so. However, the long-term consequences of not filing are often far worse.
Learn more about what bankruptcy does to your credit score and how Chapter 7 and Chapter 13 bankruptcy can affect your credit report.
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6. Taking the Chapter 7 means test
Counsel from a personal bankruptcy lawyer is essential for maximizing your chances of qualifying for Chapter 7 bankruptcy.
Qualifying for Chapter 7 bankruptcy is not cut and dried. You must complete what’s called the means test to determine whether or not Chapter 7 bankruptcy is an option for you.
How much do you have to be in debt to file Chapter 7?
There is no minimum amount of debt required to file for bankruptcy. To qualify for Chapter 7 you need to complete a means test, which determines your estimated annual income.
The means test is determined by a set of requirements based on the last 6 months of your financial history, referencing pay stubs, monthly living costs, property, tax returns, and all relevant documents. Calculate your annual household income (take your last 6 months of income and multiply by 2). If that number is lower than the median income in Wisconsin households, you may claim Chapter 7 bankruptcy.
Wisconsin median incomes for Chapter 7 bankruptcy:
- 1 Person Household: $48,521
- 2 Person Household: $63,739
- 3 Person Household: $76,378
- 4 Person Household: $93,500
- 5 Person Household: $101,900
If your median income is higher than the number listed above, you may or may not be required to file for Chapter 13 bankruptcy. Just because your income is higher than average, does not mean that you must file a Chapter 13. There are exceptions to the rule, and that is why it is so important to have the assistance of a knowledgeable personal bankruptcy attorney.
Feel like you’re in the gray area? You’re not alone. Filing for bankruptcy in Milwaukee is an extremely complex process you shouldn’t face on your own. Contact Milwaukee bankruptcy lawyer Steven R. McDonald for a free consultation, and a guiding hand through the bankruptcy filing process and the requirements for doing so.
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7. What are bankruptcy exemptions?
State and federal bankruptcy exemptions protect your property for your use.
When you file a Chapter 7 bankruptcy, nearly all your assets become property of a bankruptcy estate. An exemption is a law designed to preserve your property for your use.
Without exemptions, a bankruptcy trustee appointed in each case can sell your property to pay your creditors. The proper use of exemption laws can prevent this.
A knowledgeable attorney can help you match the things you own with appropriate exemptions so that you can keep your property.
In Chapter 13 bankruptcy, you are allowed to keep all of your property whether it is exempt or not provided you follow an approved debt payment plan. It is important to know that in Chapter 13, exemptions can be used to help reduce the amount of money that you’ll need to pay to unsecured creditors.
Wisconsin and Federal bankruptcy exemptions are similar. Both include exemptions for a homestead, pensions, child support, and insurance benefits, among others. However, only the Federal exemptions include a wildcard exemption that you can apply to anything you own (up to a certain value).
Under bankruptcy law, you may choose either federal exemption statutes OR state exemption statutes, but you can’t cherry pick from both.
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8. How often you can file for bankruptcy in Wisconsin
Attorney McDonald will ensure you receive the full protections available under bankruptcy law.
If you want to file for Chapter 7 bankruptcy, you must wait at least eight years since your last Chapter 7 discharge, and at least six years since your last Chapter 13 discharge.
If you want to file for Chapter 13 bankruptcy, you must wait at least four years since your last Chapter 7 discharge, and at least two years since your last Chapter 13 discharge.
The time interval is measured from the date you filed each bankruptcy case in which you received a discharge.
If your last attempt at filing bankruptcy did not result in a discharge, you may be able to file again depending on why your previous debt was not discharged. Bankruptcy law is designed to discourage multiple bankruptcy filings in a short period of time. This practice is referred to as serial filing. If you recently filed a bankruptcy case that was dismissed without a discharge, it is possible that you may not receive the full protection of the bankruptcy law. A good lawyer can ensure that you receive the full protections available under the law and make sure that your case will not get dismissed again.
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- Number of bankruptcy filings in Wisconsin 2020: 18,783
- Percent of bankruptcies that were Chapter 7: 71%
- Percent of bankruptcies that were Chapter 13: 29%
- Median household income of bankruptcy filers in Wisconsin: $46,341
- Average amount of debt discharged in a Chapter 7 bankruptcy in Wisconsin: $54,769
- Average monthly payment for a chapter 13 bankruptcy in Wisconsin: $557
- Percent of bankruptcy filers in Wisconsin who were homeowners: 40%
- Percent of bankruptcy filers in Wisconsin who had a college degree: 25%
- Top reason for bankruptcy filing in Wisconsin: Medical debt
- Average length of a Chapter 13 bankruptcy in Wisconsin: 60 months
If you’re considering filing for bankruptcy in Wisconsin, you may also be interested in:
Bankruptcy Attorney for SE Wisconsin:
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Oak Creek |
Cudahy |
Franklin |
St. Francis |
| South Milwaukee |
Union Grove |
Racine |
Kenosha |
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..and more!
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Get Help Building the Foundation for Your Financial Future
Filing for bankruptcy in Wisconsin is a time-consuming process. You need to be focused on getting back on your feet as quickly as possible to avoid losing your car, house and other valuable possessions. You’ll have less time to focus on your finances if you’re bogged down in the myriad complexities of bankruptcy law.
The success rate for filing without legal representation is very poor. Leave your legal worries at the door and devote yourself to turning a new leaf. We'll keep you appraised during the full filing procedure. We're here to answer questions about declaring bankruptcy and the steps you need to take.
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