» Bankruptcy

I filed bankruptcy before, can I file again?

There is no limit to the number of times a person can file for bankruptcy. However, to avoid abuse, the bankruptcy laws only allow debt to be discharged once every eight years under Chapter 7 and once every six years under Chapter 13.

Does my spouse have to file with me?

No. However, both spouses' income and expense information may be relevant to your case. In addition, because Wisconsin is a community property state, all of the debt incurred during the marriage is owed by both spouses equally. If only one spouse files, the other is not protected by the discharge, and the creditor may be able to go after the assets or property of the non-filing spouse. As such, filing jointly may offer certain advantages including protection for both spouses as well as the ability to claim a larger amount for the homestead exemption. At Muter Law Office, we can advise you on the best means to proceed. Contact us today.

Can filing bankruptcy stop a garnishment?

In most cases, when a bankruptcy case is filed, the bankruptcy court issues an order preventing creditors from continuing their collection efforts outside of bankruptcy court. Therefore, in most cases once a bankruptcy case is filed, creditors must suspend any wage garnishments, and in fact, it may be possible to recover any wages garnished 90 days prior to filing for bankruptcy.

Can I re-pay some debts, but not others?

The bankruptcy code mandates that all creditors must be included in the bankruptcy case, and, if they are in the same class, must be treated equally during bankruptcy. Following the bankruptcy proceeding, however, you may make voluntary repayments to any creditor you choose without reaffirming the entire debt. Voluntary repayments, in fact, will help you to improve your credit score following bankruptcy.

What debts are erased by Bankruptcy?

Chapter 7 is generally available to consumers to eliminate all unsecured debt, such as credit cards and medical bills. Chapter 7 does not eliminate secured debt, and the Chapter 7 debtor must continue to keep current on all secured accounts, including home mortgages and car loans. Certain debts are non-dischargeable in a Chapter 7, such as recent taxes due, certain student loans, child support and alimony, and any debt procured by fraud.

How will bankruptcy affect my credit score?

While bankruptcy serves to prevent creditors from collecting on debts owed, it does not erase negative information, such as history of late or missed payments, from your credit report. That information will stay on your report typically for 10-11 years, depending on the information being reported. In addition, filing for bankruptcy itself will appear on your credit report and will negatively affect your credit score. A Chapter 7 Bankruptcy filing will generally stay on your report for ten years and a Chapter 13 bankruptcy will appear for seven years from the time repayment is complete.

Attorney Misty Muter works with individuals and families to consolidate debt and seek other solutions that will not negatively impact an individual's credit rating. In addition, Attorney Muter counsels individuals who have poor credit scores on ways to build credit and improve credit ratings by, for example, making voluntary repayments.

Can I keep my house?

In the state of Wisconsin, like most other states, there is a provision that exempts equity in the family home. While in some states, there is no limit to the amount of the exemption, in Wisconsin, the maximum amount of equity which is protected in bankruptcy is $75,000 ($150,000 for a married couple filing jointly). In addition, if you sell your home and intend to purchase another home with the proceeds of the sale, you may use the exemption to protect that money for up to two years after the sale. It is important, however, to consult with a qualified bankruptcy attorney as there are certain conditions that have to be met in order to be able to claim the homestead exemption. Contact our office to learn more.

Who will know that I file Bankruptcy?

There are certain categories of people that will be involved in the bankruptcy proceeding and will, therefore, learn about your bankruptcy filing, including creditors. In addition to creditors, your spouse and others in your household, even if not included in your filing, must be made aware of the bankruptcy proceeding. Further, if you owe money to any friends or family members, they will be notified as well. Employers may also become aware of your bankruptcy filing under certain specific circumstances.

Moreover, while bankruptcy proceedings are not published in newspapers, such as foreclosure notices are, bankruptcy proceedings are a matter of public record. Because accessing court records is a cumbersome process, however, it is unlikely, except in a handful of situations, that others will find out about your bankruptcy proceeding, unless you choose to tell them. As a practical matter, it is of course possible that you will run into someone you know at a hearing in bankruptcy court. However, experience has shown that when others do find out, they are generally accepting and understanding and can even serve as a source of support during this difficult time.

Will my creditors stop harassing me?

During a bankruptcy proceeding, the bankruptcy court issues an order preventing creditors from continuing their collection efforts outside of bankruptcy court, including efforts to garnish wages, foreclose on a home, repossess a vehicle, and call or send letters to debtors. Unfortunately, it is not uncommon for these aggressive collection practices to continue, even after the debt is discharged in bankruptcy. You do not, however, have to live with the threats and harassment from debt collectors. There are state and federal laws designed to protect you from such abuse. If you have been the victim of threats, abuse, or harassment by a creditor or debt collector, contact our office today.

What is a Chapter 13 Bankruptcy?

Chapter 13 bankruptcy involves reorganization or a repayment plan for individuals or small proprietary business owners (not corporations or partnerships) who meet certain income and debt criteria. Chapter 13 bankruptcy allows a debtor to reduce the amount of debt through a payment plan while retaining certain assets which would otherwise be liquidated in a Chapter 7 bankruptcy. In addition, for debtors who have fallen into arrears on their mortgages, real estate taxes, or car loans, Chapter 13 is an attractive choice as it allows them to force a repayment plan on creditors to repay those arrearages over time. Income tax debt may also be repaid similarly. Many consumers choose this type of bankruptcy if they are trying in good faith to pay back the majority of their debts, or if they are trying to save their house or restructure a car loan. Some typical reasons for filing a Chapter 13 bankruptcy are listed below:

  • Stop a home foreclosure and give the consumer up to five years to become current on their mortgage.
  • Restructure a car loan to either reduce interest, principal, or in some instances, reduce both principal and interest on the car loan.
  • Pay back income taxes without having to pay back all of the accrued penalties and interest.
  • Pay back general unsecured creditors (credit cards or personal loans) without paying back all of the future interest accruing on the account.

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