People who consider filing bankruptcy (debtors) may behind on bills and sometimes owe money to many different people, businesses, and organizations (creditors).  In some cases when a debtor files for bankruptcy protection, the bankruptcy estate will
pay the creditors a portion of the money that they are owed by the debtor.  However, there is usually not enough money in the bankruptcy estate to pay every creditor’s claim. To minimize confusion and conflict, rules of priorities have been established for creditor’s claims, with the highest priorities being paid first and the lower priorities being paid accordingly.

The claims with the highest priority are those for child support owed to individuals or government agencies. Other priority claims include those for the bankruptcy estate’s administrative expenses, various taxes, and certain personal injury claims. Some debtors, especially landlords and business operators are impacted by certain priority claims such as unpaid wages, salaries, and leave owed to employees and deposits for unfulfilled rentals and services.

The order of priority claims has been established by federal law; this means that the order of these claims will be the same, no matter where a debtor files for bankruptcy protection. Even though the order of priority will be the same everywhere, priority claims, like the entire bankruptcy process can be confusing and intimidating. Contact Nicolet Law Office, S.C. today to discuss your bankruptcy options.

-Russell D. Nicolet

Russell is a Wisconsin 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.

A recent Wisconsin bankruptcy case, Cirilli v. Bronk (In re Bronk), 444 B.R. 902 (Bankr. W.D. Wis. 2011), explored the murky topic of asset protection and served to further illustrate the fine line that exists between legitimate asset protection and fraudulent actions, between acceptable exemptions and invalid exemptions.  In Bronk, before filing bankruptcy, the debtor took out a mortgage on his home and purchased college savings accounts for his grandchildren. The debtor also shifted funds from a certificate of deposit to an annuity. The bankruptcy trustee objected to the debtor’s pre-bankruptcy actions and to his claimed exemptions. The court eventually determined that Bronk did not act in a fraudulent manner per se, but under the circumstances, he was not allowed to exempt the college savings accounts.

An attorney familiar with bankruptcy and asset protection should be consulted before you take any measures to protect your assets or start the bankruptcy process.  Certain unadvised actions such as opening a line of credit or transferring an asset shortly before bankruptcy may necessitate that you wait for a period of time before filing bankruptcy and/or cause other serious issues. A knowledgeable attorney can work with you and for you to ensure that you are afforded all of the benefits that come with bankruptcy in a timely manner while also ensuring that you do not lose any more assets than necessary.

-Russell D. Nicolet

Russell is a Wisconsin 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.

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.

Under a Chapter 7 bankruptcy the goal is generally to discharge most of your debt. In some cases, in order to discharge your debt you may decided to give up higher priced “secured” items such as automobiles or secured items which have lowers that exceed the value of that item (the collateral). Sometimes this can be beneficial to a individual filing bankruptcy, but other times that individual may wish to keep their car. Either option is usually available in bankruptcy.

 If a individual wishes to keep their automobile the individual and their attorney may decide that a reaffirmation would be in the best route.  When an individual reaffirms a debt they agree to still be liable for a debt even though it would have normally been discharged through the bankruptcy process, however, often the trade off is that the creditor will “allow” the individual to keep the automobile and will report the future vehicle payments to the credit reporting bureaus (this can help rebuild credit). As such, the individual will have to continue to make regular payments on the reaffirmed debt. A individual may have to prove to the bankruptcy court that they have sufficient income to cover these payments before the court will approve a reaffirmation agreement.

 Reaffirmations should be used with caution; if you reaffirm a debt and fail to make the required payments you may again become susceptible to collection attempts and/or repossession.  Contact an attorney today to discuss your bankruptcy and reaffirmation options.

-Russell D. Nicolet

Russell is an 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

When a debtor files for bankruptcy something known as an “automatic stay” begins. In most cases the automatic stay prohibits creditors and collectors from contacting the debtor. Creditors and collectors who violate the automatic stay and continue to contact debtors may end up being penalized for violating the stay.

Aside from stopping collection calls the automatic stay may provide relief from eviction, vehicle repossession, threatening collection letters, and even foreclosure. The automatic stay is a powerful and helpful aspect of bankruptcy law, but its protection can sometimes be limited. For instance, a creditor can petition, or ask the court to cancel the automatic stay and allow the creditor to resume collection.

Contact an attorney today to determine whether bankruptcy and the protections offered by it can help.

-Russell D. Nicolet

Russell is an 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

A common question we hear is, “How will child support (either paying it or receiving it) affect my bankruptcy filing?” 

If you owe child support, whether you are current or owe back child support, these amounts are not dischargable in a bankruptcy.  Simply put, you will have to continue to pay any child support monies owed.  However, the amount that you pay monthly is calculated in the Means Test, which may mean that people who pay child support who would not otherwise qualify for a Chapter 7 may qualify once the amount of child support they are paying is factored in.  Only the amount that you are actually paying will be used for the deduction.

 If you are receiving child support, this money is counted as income on your Schedules as well as on your Means Test, and is treated just like regular income.  However, you only have to account for the money that you actually receive, not that amount that you are supposed to receive.  You will be asked to provide an accounting for the amount you have received each month for the 7 months prior to the date your bankruptcy is filed.  Your county child support worker can help you gather this information.  If the person who is paying you child support writes a check directly to you, you will need to produce copies of these checks for the 7 months prior to the date your bankruptcy is filed.  Child support arrearages (amounts you are owed, but have not yet received) are protected under 11 U.S.C. 522(d)(10)(D) and have no limit.  This means that even if you are owed a substantial amount of child support, it is protected from the reach of your creditors.

 For more specific information regarding how child support will affect your bankruptcy filing, please call our office to set up an appointment.

-Russell D. Nicolet

Russell is an 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

Nicolet Law Office, S.C. has offices located in Hudson, Wisconsin and Eau Claire, Wisconsin and represents clients in Hudson, River Falls, Roberts, Baldwin, Menomonie, New Richmond, Somerset, Ellsworth, Prescott, Amery, St. Croix Falls, Osceola, Eau Claire, Chippewa Falls, and Surrounding Areas of Wisconsin and Minnesota.  For more information visit: