Above all else, bankruptcy is a fresh start; it is a way for people and businesses to deal with debt that may otherwise be overwhelming for them. Perhaps one of the best statements to sum up the benefits of bankruptcy was made by the United States Supreme Court during the Great Depression, “[bankruptcy] gives to the honest but unfortunate debtor … a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” Local Loan v. Hunt, 292 U.S. 234, 244 (1934).

The first and arguably the most important step in the bankruptcy process (after
determining or having a bankruptcy attorney help you determine if bankruptcy is
a good option for you) is to determine whether to file bankruptcy on your own
or with an attorney. If you choose to file with an attorney, it is important to
find a knowledgeable bankruptcy attorney that you are comfortable working with.
This attorney should act as your guide throughout the bankruptcy journey and
should work with you to maximize the bankruptcy benefits which may be available
to you. You will need to provide your attorney with information and
documentation regarding your financial situation in order for you and your
attorney to determine what options would work best for you.

There are several Chapters (types) of bankruptcy in existence. The two most common
Chapters are Chapter 7 and Chapter 13. Chapter 7 may be the most sought after
Chapter of bankruptcy because it has the ability to discharge or erase large
amounts of debt. However, to file a Chapter 7 bankruptcy your earnings must be
under a certain limit. If you make over a certain amount of money you may still
qualify for Chapter 7, but would have to undergo what is known as a “means
test.” In a means test your attorney will examine your finances to determine
what exemptions may be available to you. These exemptions cancel out portions
of your earnings, thus hopefully putting you under the earnings limit.

Even if you are not able to qualify for Chapter 7, Chapter 13 is also very beneficial
to debtors. Under Chapter 13, portions of your debt may be discharged, but much
of your debt will be repaid over a period of time.  You and your attorney will work to put
together a repayment plan based upon your regular income and your debts.  This repayment plan will pay back a portion of your debts, but not all of it.  Once your
repayment plan is approved by the court you will begin to make payments to a
trustee who will pay your creditors. Upon completion of your payment plan,
other remaining portions of your debt may be discharged.

After determining which Chapter is right for you, your attorney will file a
bankruptcy petition with a United States District Court. Aside from a required
meeting with creditors, your attorney will handle most (if not all) contact
with the court and creditors. In fact, creditors are not allowed to contact you
after you’ve filed for bankruptcy (unless authorized by your attorney or the
court).  During the bankruptcy process your attorney will work with your creditors, the trustee, and the Court to ensure that you receive every possible benefit available to you and a full discharge of your dischargeable debt(s).

-Russell D. Nicolet

Russell is a Wisconins Bankruptcy Attorney with Nicolet Law Office, S.C. Nicolet Law Office, S.C. has offices in Eau Claire, WI and Hudson, WI and handles Chapter 7 and Chapter 13 bankruptcy for clients in Hudson, New Richmond, River Falls, Prescott, Ellsworth, Roberts, Osceola, St. Croix Falls, Menomonie, Eau Claire, Chippewa Falls and surrounding areas of Wisconsin. For more information call 715-377-2141 or 715-835-5959 or visit www.nicoletlaw.com or www.eauclairebankruptcy.com

This blog is provided by Nicolet Law Office, S.C. for general information of bankruptcy in Western Wisconsin. This website is for general information only and is not legal advice.  For legal advice please setup a consultation with our attorney or with another attorney of your choosing.