Wisconsin Bankruptcy Law

In a previous blog posting, we discussed the means test and the median family income as they relate to an individual bankruptcy in Wisconsin. The median family income as determined by the federal government varies from state to state and also depends on the size of your family.

The means test in part determines whether a debtor can file a Chapter 7 bankruptcy in Milwaukee (or elsewhere). Or, in the alternative, a Chapter 13 repayment plan. In other words, the means test is a line in the sand a between eligibility for a Chapter 7 liquidation or Chapter 13. In short, it can have huge financial ramifications about what, if anything, you need to pay back in a consumer bankruptcy in Milwaukee.

Before a debtor passes or fails the means test, various items that can be deducted from your income under the bankruptcy laws in Wisconsin. Although each situation has unique aspects, necessary expenses can include taxes, union dues, health and disability insurance, child care expenses, energy costs in excess of the national average, and job-related education, among others. To establish these expenses to the satisfaction of the bankruptcy court, you’ll need organized, valid records for at least six months prior to the bankruptcy filing.

Determining all the applicable exemptions and expenses in a bankruptcy case is a job for a trained professional. Millions of Americans file bankruptcy every year for one reason or another. Lawmakers created the bankruptcy code to help protect honest, hard-working people from suffering through their financial disasters. At the same time, the laws can be very tricky and technical, so it is essential to obtain guidance and input from an experienced Wisconsin bankruptcy lawyer. Do not go it alone.

Bankruptcy is not suitable as a do-it-yourself proposition. The bankruptcy laws have a lot of complex technicalities which explains why you need a skilled legal expert to guide you in a personal bankruptcy in Milwaukee or in any other localities in Wisconsin. Here are a few things to keep in mind in an initial consultation with a Wisconsin bankruptcy lawyer.

Fully disclose all financial issues. Don’t hold back. As we discussed in previous blog entries, concealing any financial information is against the law. It can also result in a dismissal of the bankruptcy case, and in some instances can result in the debtor being locked up.

Answer the lawyer’s questions candidly. Some answers may be slightly uncomfortable, but to effectively represent you and provide you with sound legal advice, the lawyer needs you to put all your cards on the table.

Getting a second opinion is fine. As an informed consumer,  it’s your prerogative to speak with more than one lawyer, but don’t shop around for another lawyer merely to spin a difficult situation more to your advantage, perhaps by withholding key facts.

A general practitioner or an inexperienced lawyer is not your best advocate. Look for an experienced bankruptcy attorney who practices in the bankruptcy courts ever day. That’s the kind of track record that you need for an individual bankruptcy in Wisconsin.

Finally, your friends and relatives will be very well meaning, but any final decision about filing a Chapter 7 bankruptcy in Milwaukee should be made in close consultation with a skilled legal professional who stays on top of the bankruptcy laws in Wisconsin.

If you need to file bankruptcy, choosing the right lawyer is critical. In many cases, the simple truth is that the more experienced attorney will do a better job, which means getting you the most benefit from filing and avoiding the mistakes that someone less experienced is bound to make.

The Milwaukee Business Journal reports that an increasing number of southeastern Wisconsin real estate developers have been forced into a personal bankruptcy in Milwaukee because of Wisconsin bank foreclosures in the commercial sector. The story explains that “Developers typically provide personal guarantees on their commercial mortgages, which means banks eventually pursue the developers personally for a judgment.” In general, a developer that has signed off on a now-defaulted, huge personal note for a commercial property can seek Chapter 7 protection if the lender decides to take the matter to court.

But as we have alluded to previously, Chapter 7 isn’t just for real estate moguls or entrepreneurs that have been undermined by fading property values. For most ordinary, hardworking Wisconsin consumers facing serious financial difficulties, a Chapter 7 bankruptcy in Milwaukee often allows homeowners to remain in their primary residence while the case works its way through court. Exemptions that among other things protect the residence were created in order to provide debtors with the basic essentials needed to help them achieve a fresh start. And during that time, any foreclosure attempts by the lender come to a grinding halt. Perhaps you’ve been downsized out of your job and can no longer afford your high monthly mortgage payments. Protection under the bankruptcy laws of Wisconsin may be an option for obtaining needed debt relief in Wisconsin. A step in the right direction might be to obtain guidance from a debt consolidation lawyer at the initial appearance of financial distress.

Have you reached the point of no return when it comes to financial difficulties? Making the decision to file for an individual bankruptcy in Wisconsin is not to be made lightly. It’s difficult for many consumers–especially given widespread unemployment and plummeting home equity– to really come to grips with their financial picture. With that in mind, here is a list (suggested by Los Angeles attorney Christine Walton) of some warning signs that it may be time to seek counsel from a Wisconsin bankruptcy lawyer:

    * You’ve emptied your entire bank account to pay bills and are considering tapping into your IRA for the same reason
    * You’re using plastic to as a short-term fix, but the card balance is getting entirely out of hand
    * Your rent or mortgage is seriously overdue
    * Debt collectors call you more often than your own family
    * You can barely pay more than the minimum payment on your outstanding debts
    * You’re about to lose your car to the repo man

If these challenges sound familiar, declaring a Chapter 7 or Chapter 13 in Milwaukee may perhaps be the next logical shoe to drop. Bankruptcy protection in federal court under the bankruptcy laws of Wisconsin can allow a consumer to clear a lot of debt off the books and start anew. A no-obligation candid assessment of your situation by a debt consolidation lawyer may be the first step towards much-needed debt relief in Wisconsin.

This blog often addresses the careful decision making that may or may not lead a debtor to an individual bankruptcy in Wisconsin. But in certain circumstances under the bankruptcy laws of Wisconsin, a creditor can go to federal court to force a debtor into Chapter 7. This is called an involuntary bankruptcy, but it is not all that common because it comes with various technical strings attached.

Under the law, if a debtor is on the hook for about $10,000 or more to 12 or more creditors, three of the creditors must join forces to file the involuntary bankruptcy petition. If the debtor has less than 12 creditors, then only one of them need file, again provided at least $10,000 in debt is at issue. Also, the creditor(s) must provide evidence that the debt or debts in question are undisputed and that the debtor is in default on the obligations.

Why would a creditor go to all the trouble of filing involuntary bankruptcy papers against a consumer? Perhaps creditor might be concerned that a consumer is going on a spending spree (perhaps in anticipation of a bankruptcy filing down the road) rather than pay overdue bills. Another reason might be a concern that the debtor is hiding assets or parceling out money or property so that there is nothing left for creditors to seize. But going in this direction can be a risky proposition for the creditor. If the bankruptcy court decides that the involuntary petition was filed in bad faith or has no basis, the petition can be dismissed and the court can turn the tables on the creditor and order it to pay damages and legal fees to the debtor. By the way, farmers can’t be dragged into an involuntary bankruptcy by law, so if you’re a farmer, that’s one less thing you have to worry about in today’s difficult economy. Nor does an involuntary bankruptcy apply to a Chapter 13 bankruptcy in Milwaukee or elsewhere in Wisconsin.

The bankruptcy court gives the debtor an opportunity to respond to an involuntary petition before determining which, if any creditors are entitled to debt relief in Wisconsin. If you’ve been targeted for an involuntary bankruptcy, you need the services of a Wisconsin bankruptcy lawyer right away. A Milwaukee bankruptcy attorney can size up your situation and put together a response to the court that will, if appropriate, contest the involuntary bankruptcy attempt and otherwise protect your financial interests from overreaching creditors.