Wisconsin Bankruptcy Laws

When borrowers’ aspirations meet with difficulties that veer the best of intentions off course and result in financial struggles impossible for the average Wisconsin households to overcome by themselves midst rising unemployment statistics and falling property values, credit card debts can quickly become too vast for individuals to manage without external assistance. The reality of the current national economic instability is hitting home at last, and a tragic portion of Wisconsin residents are encumbered with debt loads affixed to interest rates and penalties that only increase as the household’s ability to make the scheduled payments diminish. Greater numbers of Wisconsin consumers folding under the pressures that outweigh their budgetary capacities and aiming for any recourse have started looking for bankruptcy protection as their last, best prayer for credit salvation only to find that the deprivations and practical inevitabilities part and parcel of modern bankruptcy proceedings have rendered Chapter 7 debt elimination bankruptcy far harder to attain and far more irritating to abide. Whether the Wisconsin households realize they’re already in too deep midst credit card balances or even if they’re simply treading water at present, Wisconsin borrowers of any status should take all necessary precautions to raise their awareness of bankruptcy and all of the possibilities related to the resolution of unsecured debt. The institution of bankruptcy has historically availed itself to debt sufferers in Wisconsin and elsewhere in the United States to great benefit, but recent fundamental changes to the laws regulating its procedure should inspire great reservations within those filing. These tight directives can seem almost impossible to meet, especially when borrowers consider that Federal restrictions disallow any Americans to file Chapter 7 if they make above the median income for their state of residence.

In the state of Wisconsin, that median income is currently determined to be forty one thousand five hundred and twenty eight dollars for a single wage earner. It increases to fifty four thousand two hundred and ninety seven dollars for a family of two, sixty five thousand four hundred and forty for three family members, seventy four thousand five hundred and sixty dollars for four members, and another six thousand and nine hundred dollars for each additional member. For many families within Wisconsin who’ve spent well beyond their means over the past decade and amassed enormous levels of unsecured debts (or, as symptom of the health insurance crisis savaging so many households, suddenly had hundreds of thousands of dollars of hospital debt dropped in their laps), the median level of income assessed for Wisconsin residents will not still allow them to even meet the minimum requested payments. As well, remember, the Chapter 7 bankruptcy eligibility requirements also examine only the first half of the calendar year prior to petitioning for protection, and, with so many Wisconsin households witnessing their incomes fall midst the current recession, this requirement for bankruptcy may seem even more impossible to meet. Understating figures upon the original bankruptcy paperwork may seem like an unbearable temptation, but potential filers shall have to make sure that they record their income sources with unerring accuracy in order to avoid potential criminal charges and penalties. The same goes for a complete listing of household goods. Chapter 7 bankruptcy protection, as most Wisconsin debtors already understand to some extent, threatens the borrower’s property, assets and income with potential forfeiture. Anyone concerned about retaining their home through bankruptcy, for instance, should study these restrictions very closely as, under the exemptions instituted by the state of Wisconsin, any personal residence containing equity of more than forty thousand dollars will be subject to potential seizure by the state.

Furthermore, after carefully itemizing all household goods and furnishings, the value of almost everything that the Wisconsin family owns must be appraised with an eye to the possible replacement value. Wisconsin law allows the debtor to keep property within a five thousand dollar limit, but, outside of this exemption, any and all home furnishings, home appliances, musical instruments, library, clothing and accoutrements, family heirlooms, jewelry, guns, or sporting equipment would be earmarked for forfeiture under Wisconsin state bankruptcy laws. Should any of the borrower’s motor vehicles be worth more than one thousand and two hundred dollars above blue book value, they would also be at risk. Business and farm property are protected only up to a limit of seven thousand and five hundred dollars, and, though veterans’ benefits and military pensions are automatically left alone, many retirement accounts may be threatened by the Chapter 7 bankruptcy program. The entire list of exemptions is far too long to list within this article, but, for obvious reasons, every debtor who is at least curious about needing to file for bankruptcy protection one day down the road shall have to explore the Federal Bankruptcy Code and the additions made by the Wisconsin legislature so that they would more fully understand just what their family may have to give up in exchange for a freedom from credit card bills and other unsecured obligations.

The length and breadth of the information required by the original bankruptcy petition and associated paperwork may seem daunting to Wisconsin residents untrained in financial matters and already harried by household responsibilities, but every debtor attempting bankruptcy protection must take as much care as possible to ensure the accuracy of the data presented. For borrowers who took the time and effort to verify every aspect of their documentation (and, perhaps more importantly, took advantage of the proficiency of one of the better Wisconsin law firms), there shouldn’t be any reason to worry, and the eventual meeting with the Wisconsin court trustee should be considered as little more than a formality: essentially, a member of the Wisconsin judiciary randomly selected will just ask the borrowers to affirm everything included in their petition. However, in the event that the consumers declaring bankruptcy did slip up along the way – whether from ignorance or because they were afraid – this would be their last chance to erase past mistakes through verbal testimony. If petitioners do willfully lie to the Wisconsin judicial liaison about even the most seemingly meaningless item buried within the formally signed bankruptcy claim, they will most certainly face jail time for an easily proven perjury offense. Once everything’s already set on paper, there’s never any point in lying; all discrepancies among documents will be examined by the analysts commissioned by the Wisconsin courts to investigate every potential dispute. Whenever borrowers claim one thing – whether asset or debit – and the papers say another, the governmental accountants will grasp upon that inconsistency and demand the truth from their victims.

Of course, every borrower realizes in their heart of hearts that omitting any potential asset or earning could be considered to be intentionally defrauding government authorities for personal gain, but many of the Wisconsinites filing for bankruptcy skate through the accompanying creditor matrix: arguably the most important aspect of the entire bankruptcy petition since this alone identifies the debts that would be eliminated through Chapter 7 protection. There really shouldn’t be any reason to not include the information about every single loan no matter how small since, otherwise, the funds owed would not be able to be discharged by the Wisconsin courts. Even those debts designated as charged off (which just means that the lenders report the funds owed as unable to be properly satisfied for the potential tax break; the lenders retain all legal rights to recoup their money) will potentially return to haunt the Wisconsin debtors years after their bankruptcy protection has been finalized if the obligations were not identified within the original paperwork. There’s no recognizable benefit to credit ratings and FICO scores for disguising these loans once the borrowers have already declared their intent for bankruptcy protection. Worse, should the judicial authorities appointed by the Wisconsin courts to oversee the Chapter 7 or Chapter 13 proceedings catch a whiff of anything that they may believe to be preferential, the questionable treatment of past debts will immediately raise red flags. Bankruptcy protection veers toward the sharpest edge of the social contract that all citizens of Wisconsin and the United States hold to be true regardless of past legislation. All creditors shall assume that the erasure of their debts be handled equitably – equally, that is, throughout all debts – and the governmental officials charged with oversight of the bankruptcy claims take this responsibility extremely seriously.

Modern bankruptcy’s far more complicated and potentially ruinous than most Wisconsin households had ever realized, but the winds of change gusting about bankruptcy protection also signal the arrival of new solutions to consumer finance providing a much needed response to a void of alternatives to debt resolution. When the Wisconsin debt holder is aware of the facts surrounding bankruptcy, every different option to this arduous procedure warrants study, and, for Wisconsin families genuinely troubled by their debt burdens – whether or not they’re a result of familial emergencies or shopping sprees whose obligations linger well after the memory of past purchases have fallen away – the opportunity for completely eliminating all unsecured debts absent the shortcomings of bankruptcy protections rewards careful investigation. Debt settlement negotiation, more than any other of the new credit solutions, has successfully helped hundreds of Wisconsin families reasonably suspicious about bankruptcy protection to dramatically reduce their unsecured balances by threatening the lenders with Chapter 7 liquidation if they do not immediately agree to cuts across the board. With the right sort of debt (not every creditor will indulge settlement negotiation) and the right sort of debtor (most legitimate settlement firms pressure their clients to pay their balances within less than five years), this type of program can reward forward thinking Wisconsin households far more than the diminished version of Chapter 7 loan liquidation bankruptcy protection currently at play could ever hope to achieve.

The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it’s nearly unbearable. You struggle along while your creditors are turning up the heat. And now you’re at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.

Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?

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