There are a lot of things that people hear about the bankruptcy process that are simply not true. These are some of the most common myths about bankruptcy.
1. You will lose your house, car, and other assets if you file a bankruptcy. This is one of the most common things that we hear from potential clients at the Bankruptcy Law Center. The truth is that if you hire an attorney who knows the bankruptcy laws and how to protect your assets, like the attorneys at the Bankruptcy Law Center, you will be able to keep your house, car, and other assets and still be able to discharge your debts in a bankruptcy. Continue reading
If you are having problems paying your debts and considering filing for bankruptcy, it is important to understand what bankruptcy actually entails. There are crucial differences between a Chapter 7 and Chapter 13 bankruptcy that must be considered before deciding which type of bankruptcy to file. Here at the Bankruptcy Law Center, we can assist you with learning about the differences between the two types of consumer bankruptcy and assist you with understanding how it impacts you in both the short and long term.
Chapter 7 bankruptcy discharges your unsecured debts and allows you to continue to keep your secured debts like your house and your car. It generally takes about three months for you to receive your discharge order after you first file. You must meet certain income guidelines to qualify to file for Chapter 7. Certain types of debt including child support, federal student loans and taxes owed to the IRS are not discharged in bankruptcy. Unsecured debts such as credit card debts, medical bills, repossessions, evictions, and judgments are dischargeable in a Chapter 7 bankruptcy. Continue reading
Are you struggling under a mountain of debt with no hope in sight? Well, there is hope. You can halt collections and foreclosures immediately, wipe out most if not all of your debts, and get a fresh start.
We are Attorney Kristie Radloff and Attorney James Stanek of the Bankruptcy Law Center, with offices in Milwaukee, Racine, Elkhorn and Port Washington. We have helped thousands of people like you to wipe out their debts and get a fresh start. We want to help you, too. Continue reading
To rebuild your credit, we’ll start with a bankruptcy worksheet
Congratulations, you have successfully completed your bankruptcy and received a discharge of your debts. Other than not taking on any unnecessary debt, what should you do now in order to take advantage of your fresh start? After all, the goal is not just to get out of debt, but to thrive financially and create a better life for yourself. Here are a few steps you can take to rebuild your credit and maximize your chances of having a prosperous future:
1. Pay Your House and Car Payments On Time
If you plan to keep your home or car, continue to make your mortgage or car payments on time. The lenders will have retained their liens on the house and car, so if you want to keep them you must continue to pay for them, otherwise the lender will have a right to foreclose or repossess. And just as importantly, in order to begin rebuilding your credit, you want favorable reporting from these lenders, as house and car payments have a large impact on your credit score. Just by getting out of debt you have set yourself up to rebuild your credit within a relatively short time, and having favorable reporting from mortgage and car lenders will speed this process. Please note that if you did not reaffirm your mortgage or car loan, most likely your payments (or non-payments) will not be reported to the credit bureau. If that is the case, contact your attorney for further discussion on how to lessen the impact that non-reporting can have. If you obtained a car loan after your bankruptcy, be sure to make those payments on time, as that lender will most definitely report your payments to the credit bureaus. Continue reading
Do you owe income tax debt to the IRS?
Income tax debt is a very specific and troublesome sort of debt to have, but even tax debt can be treated in bankruptcy to aid a person suffering from this burden. Generally speaking, most tax debts can’t be wiped out in bankruptcy — you’ll continue to owe them at the end of a Chapter 7 bankruptcy, or you’ll have to repay them in full in a Chapter 13 bankruptcy repayment plan. But there are situations when tax debt will qualify for discharge. Here are some general rules concerning dischargeability of tax debt:
When You Can Discharge an Income Tax Debt
You can discharge (wipe out) debts for income taxes in Chapter 7 bankruptcy only if all of the following conditions are true: Continue reading
For those who qualify, bankruptcy is truly a way out of trouble. You’ve been trying to ward off your creditors, and in doing so may be barely getting by, and living under extreme stress. Stop draining your retirement accounts and other savings and realize that bankruptcy can be very positive. Here are five benefits to filing for bankruptcy protection:
1. You Can Keep Your Home
While bankruptcy is handled through the federal court system, state law can come into play concerning your assets. Wisconsin residents filing for bankruptcy can take advantage of Wisconsin’s generous exemptions concerning the home in which they reside. If the net equity in your home is less than $75,000 ($150,000 for a married couple), you will not be in jeopardy of losing your home due to a Chapter 7 bankruptcy filing. In addition, even if your equity exceeds the exemption amount, you can still keep your home by filing a Chapter 13 bankruptcy. A skilled bankruptcy attorney will be able to let you know exactly what options are available to you concerning your home.
2. Your Creditors Will Stop Hounding You
When a bankruptcy is filed, an automatic stay immediately goes into effect. This stops virtually all collection activity against the debtor. If a wage garnishment has been initiated, it now must stop. While it is always better to file the bankruptcy before any wage garnishment goes into effect, it often happens that the wage garnishment itself is what caused the debtor to finally seek bankruptcy protection. Once the bankruptcy is filed, the garnishment ceases immediately. It does not matter that the creditor doing the garnishment has obtained a judgment. That debt will be treated through the bankruptcy process regardless of whether or not it has been reduced to judgment.
In many situations, where a debtor has been garnished prior to the bankruptcy filing, the debtor’s lawyer is able to recover some or all of the debtor’s wages that have already been lost to garnishment. This is because laws that help bankruptcy trustees recover property for creditors can also be used to help the debtor. A skilled bankruptcy attorney will be well versed in these laws. Continue reading
Is Your Driver’s License Suspended For An Unpaid Judgment From An Accident?
Having your driving privileges suspended due to a judgment or debt from a car accident where you did not have car insurance is a reality in Wisconsin. Wisconsin law provides that a license may be suspended for failure to satisfy a motor vehicle accident debt. So if you wind up in an accident with no car insurance, you may end up without a license. Not having a license will prevent you from driving to work, school, or anywhere else, no matter how important or urgent. In addition, if you get pulled over driving with a suspended license, you risk fines, penalties, and possibly jail time. If you’ve had your license suspended due to an unpaid debt from an accident which you are unable to pay, you will want to seriously consider bankruptcy in order to solve your problem.
What Happens When You Get In An Accident Without Insurance?
Here is a recent article from The Atlantic, which helps to explain why so many Americans are forced to file bankruptcy due to overwhelming medical debt, despite the fact that they may have health insurance which they believed would cover the costs of their medical care.
Healthcare is the number-one cause of personal bankruptcy and is responsible for more collections than credit cards.
After his recent herniated-disk surgery, Peter Drier was ready for the $56,000 hospital charge, the $4,300 anesthesiologist bill, and the $133,000 fee for orthopedist. All were either in-network under his insurance or had been previously negotiated. But as Elisabeth Rosenthal recently explained in her great New York Times piece, he wasn’t quite prepared for a $117,000 bill from an “assistant surgeon”—an out-of-network doctor that the hospital tacked on at the last minute.
It’s practices like these that contribute to Americans’ widespread medical-debt woes. Roughly 40 percent of Americans owe collectors money for times they were sick. U.S. adults are likelier than those in other developed countries to struggle to pay their medical bills or to forgo care because of cost.
Earlier this year, the financial-advice company NerdWallet found that medical bankruptcy is the number-one cause of personal bankruptcy in the U.S. With a new report out today, the company dug into how, exactly, medical treatment leaves so many Americans broke.
Read more by Olga Khazan at TheAtlantic.com
Here is an article published in March 2015 on the website fivethirtyeight reviewing a recent study by the National Bureau of Economic Research which shows that bankruptcy can help to greatly improve a person’s credit score and improve his chances of becoming a homeowner.
Consumer Bankruptcy and Financial Health
Authors: Will Dobbie, Paul Goldsmith-Pinkham, Crystal Yang
What they found: Filing for bankruptcy protection helps financially struggling borrowers hold onto their assets and raise their credit scores and makes them more likely to own their homes.
Why It Matters
Chapters 7 and 13 of the U.S. bankruptcy code allows individuals to reduce their debts while retaining their assets. In theory, bankruptcy is meant to give borrowers a chance to get back on their feet while giving lenders a chance to recoup at least part of what they’re owed. But measuring the impact of bankruptcy on borrowers is difficult because, by definition, people who file for bankruptcy are in financial trouble; even in a best-case scenario, they’re likely to end up worse off than people who never got into trouble in the first place. In this paper, the authors take advantage of the fact that bankruptcy cases are assigned to judges at random. Since some judges are more lenient than others, the authors are able to study the impact of bankruptcy protection on people who are in similar financial circumstances. They find that in the five years after a bankruptcy filing, people who are granted protection have a 13.2 percentage point greater probability of being homeowners and have a 14.9-point higher credit score, on average, than those not allowed to enter bankruptcy. The amount of debt they have in collection fell by $1,315 on average.
Read more at fivethirtyeight