Wisconsin Bankruptcy Law

A home is the largest investment that most Wisconsin residents ever make. When the possibility of personal bankruptcy becomes a consideration, their house becomes top of mind and they want to know if it is at risk. The short answer is, “Maybe.” Filing a Chapter 7 bankruptcy does not mean that you have to surrender your home.  There are two types of debt that bankruptcy attorneys look at, secured and unsecured.  Secured debts are the types of loans that have some form of real property tied to them.  Homes and cars are the best examples of these types of debts.  Lenders have more security with these loans because they have the right to take legal action to get the cars or the houses back and resell them if their borrowers default.  Credit card debts, hospital bills, or utility bills are examples of unsecured debts.  These types of debts have no real property tied to them, and therefore there is not any sort of collateral for the creditor to collect if a borrower defaults.  Secured debts are not dis-chargeable if you want to keep the real property, whereas the majority of unsecured debts are completely dis-chargeable in a Chapter 7.  What this means is that as long as you stay current with your house payments and continue to make your monthly payments when you are supposed to, it is entirely possible to keep your home and file a Chapter 7 to clear out your unsecured debt.