Sometimes personal levels of debt can reach such levels that, given your income, it is literally impossible to ever pay off the debt. Often times this debt comes from unavoidable expenses such as medical bills. A bankruptcy action allows a legal way to help persons in Green Bay and the surrounding area with hopeless levels of debt to regain their financial footing with dignity. The law allows you to discharge (eliminate) your unsecured debt by filing a bankruptcy action either Chapter 7 or Chapter 13. This process protects you from debt collectors and allows you a fresh start with greatly reduced or entirely eliminated debts. Schedule a free initial consultation with Attorney David Daul to assess your case. Attorney Daul will look at your history, level of debt and determine your eligibility for a discharge. Our process is personal and respectful to persons experiencing one of the most difficult times in their life. Our staff will promptly file your qualified claim to maximize the discharge and meet your goals. Bankruptcy often involves working out arrangements to keep your home and vehicle. We educate our clients about what is possible under the bankruptcy code. We carefully listen to the problems you may be experiencing and craft your bankruptcy plan expertly and competently. Our process is individualized, results in the discharge of unsecured debts and allows our clients to resume their life.
During these tough economic times, many people in Green Bay, Wisconsin are finding it difficult to pay debts owed to their creditors.
There are often a variety of reasons why people seek bankruptcy relief. Usually it is due to some change in their circumstances such as an unexpected loss of job which causes a loss in income or health related concerns which causes substantial medical bills. Either way, the bankruptcy code was established for people in those type of situations to enable them to recover from such hardships and move forward with their lives with debt relief.
Individuals who file for bankruptcy relief typically file either a Chapter 7 or 13 bankruptcy case. There are substantial differences between the two types of bankruptcy cases.
CHAPTER 7 BANKRUPTCY
A Chapter 7 bankruptcy action is typically referred to as a liquidation bankruptcy. In a Chapter 7 case, a person’s non-exempt assets are sold by the trustee and the proceeds from the sale of those assets are used to pay your creditors. Most people who do file a Chapter 7 bankruptcy case are able to exempt all of their assets, which means they will be able to keep all of the assets that they own even after the bankruptcy case is concluded. There is also an income test that the person must pass in a Chapter 7 bankruptcy. In other words, you are not allowed to earn too much money and still be able to receive a Chapter 7 discharge. In most cases, you will receive a discharge of your debts at the conclusion of the bankruptcy case. You will not be personally liable for those debts that are discharged other than the debts that you may have reaffirmed, such as a home mortgage or car loan, and other unusual debts such as student loans, tax debt, and spousal support.
CHAPTER 13 BANKRUPTCY
A Chapter 13 bankruptcy case is also referred to a wage earner’s plan. Chapter 13 cases are typically utilized by people who have substantial non-exempt assets that they do not want to lose or by people who make too much money and are not eligible to file for a Chapter 7. In a Chapter 13 bankruptcy case, you will pay a monthly amount of money to a trustee who will pay your creditors over the course of three to five years. The monthly payment amount is typically determined by the amount of your disposable income. After the three to five year payments have been made, you will receive your bankruptcy discharge.
This is just a broad overview of the bankruptcy law and the differences between a Chapter 7 and Chapter 13 bankruptcy case. If you have more questions about bankruptcy law or would like to file for bankruptcy, contact local bankruptcy attorney Greg Babcock of our office to schedule a free initial consultation. Call our firm at 1-920-437-8191.
In Green Bay, Wisconsin and other states, a Chapter 7 bankruptcy is often referred to as “straight liquidation,” meaning that the debtor’s unsecured and nonexempt assets are sold, and the proceeds from the sale of those assets are used to pay the administrative expenses of the bankruptcy along with the claims of the unsecured creditors. More often than not, however, in a Chapter 7 bankruptcy, the debtor does not have any nonexempt assets and therefore there are no proceeds to pay to the unsecured creditors.
WISCONSIN BANKRUPTCY STEPS
When a Chapter 7 bankruptcy is filed, a trustee is appointed whose main purpose is to discover if there are any unsecured nonexempt assets in order to pay the debtor’s unsecured creditors. The trustee also investigates whether the debtor made any preferential transfers to any unsecured creditors or family members within 90 days of the bankruptcy filing or made any fraudulent conveyances within 2 years of the filing.
In most Chapter 7 bankruptcies, the only major event that occurs is that the debtor receives a discharge of his or her liability on dischargeable debts. In addition, the debtor is also able to retain assets subject to secured liens through reaffirmation agreements with the secured creditor, provided that all or the majority of the equity in the property is exempt and the debtor pays the secured debt.
CHAPTER 7 BANKRUPTCY ELIGIBILITY
There are several factors to consider to determine if a person is eligible for a Chapter 7 bankruptcy. This includes an evaluation of the debtor’s income (i.e. the mean’s test) and a review of the debtor’s prior bankruptcy filings. In addition, a Chapter 7 bankruptcy might not be the best scenario for a debtor who wants to keep certain property that is not exempt from creditors. In such a situation, other options should be explored including a possible Chapter 13 bankruptcy.
A Chapter 7 bankruptcy case is commenced with the filing of a petition and numerous supporting schedules with the respective bankruptcy court which essentially discloses all the assets, liabilities, income and expenses of the debtor. Once the case is filed, an automatic stay becomes effective immediately which prohibits creditors from bringing most actions against the debtor and against the debtor’s property. In certain circumstances, creditors may obtain relief from the automatic stay so that they may continue the pursuit of their claims against the debtor while the bankruptcy case is pending.
A meeting of creditors is held between 20 and 60 days after the bankruptcy case is filed. The trustee presides at the meeting and questions the debtor about the schedules and the debtor’s financial dealings. Creditors are allowed to question the debtor at this meeting but often do not attend. If it is found that the debtor is entitled to a discharge of his or her debts, the debtor will be granted a discharge about two months following the meeting of creditors and the case will be closed.
GREEN BAY WI BANKRUPTCY LAW FIRM
This is a basic overview of some of the key concepts of bankruptcy. There are many other details involved and this article should not be construed to be an exhaustive list. In the Green Bay, Wisconsin area, if you have any questions regarding bankruptcy, contact Attorney Greg Babcock at our law firm:Wanezek, Jaekels, Daul & Babcock. Our experienced attorneys are ready to help you learn your bankruptcy rights.
A person who merely transfers non-exempt assets to exempt assets on the eve of a bankruptcy filing is not by itself proof of fraud which would necessitate a bar to that person’s bankruptcy discharge. Rather, extrinsic evidence is required in order to set aside a transfer as fraudulent. This is what the Bankruptcy Court in the Western District of Wisconsin, by Judge Thomas Utschig, held in one particular bankruptcy case, In re Bronk, No. 09-15224-7. In that case, the debtor took out a loan on his mortgage free home in the amount of $95,000.00 and used that money to fund several college savings plans for his grandchildren. In addition, the debtor converted a certificate of deposit in the amount of $42,000.00 to an annuity. By doing this, the debtor was transferring his non-exempt assets to exempt assets in attempt to protect them in the bankruptcy action. The bankruptcy trustee objected on the grounds that the transfers were attempts to defraud the debtor’s creditors. The Bankruptcy Court disagreed with the trustee and found that pre-bankruptcy planning does not bar a discharge of one’s debts absent some act extrinsic to conversion that indicates fraud. A person’s desire to protect one’s assets in a legitimate way by proper use of the available exemptions is simply not evidence of fraudulent intent.