Nowadays, there are many American families who struggle with their finances. It just seems like in today’s economy, working hard is just not enough to guarantee you a stable financial state. So how do people cope with the lifestyle standards these days? To be able to manage their monthly bills, many people start carrying debt. Regardless of whether you need a loan to pay for your electricity bill, or face emergency expense like your car breaking down or having a health problem, once a person starts collecting debt, things usually go downhill.
If you are one of those people who have trouble sleeping at night worrying about money, you should know that you are not alone. In fact, many American households are right there with you. Of course, once you realize that your debt problems are getting more and more serious, you try to find a way to fix the situation. However, paying off debt is far from an easy task. Many people try different debt relief programs, different ways to get rid of their debt. while there are some who succeed in their attempts, the outcome of such attempts for many people is not that great. For people who have continually failed in their attempts to get rid of their debt, the situation may look pretty hopeless. However, they still have a chance of getting that debt relief and starting fresh. That chance is bankruptcy. While it does not have a very good reputation, sometimes bankruptcy is the perfect solution for different difficult financial problems.
Bankruptcy is definitely not for everybody as each different case may require different solutions. However, if you have tried other methods of repaying your debt and are still sitting in the same troubled spot, you may want to give bankruptcy a chance. Of course, much like with big financial decision, before you really consider bankruptcy, it is good to know that bankruptcy is and what are the bankruptcy court laws in the place where you live. Below, we will try to give you comprehensive information regarding bankruptcy court in Milwaukee.
What is bankruptcy?
Bankruptcy is a process that enables businesses and consumers to repay a certain portion of their debts or to repay all of it under the federal bankruptcy court protection. Bankruptcy can generally be divided into two main types – reorganization and liquidation.
Chapter 7 bankruptcy
Liquidation bankruptcy is called Chapter 7 bankruptcy because the trustee can take and liquidate (sell) a portion of your property in order to pay back some of your debts. However, if your property is exempt (or protected) under the law, you can keep it.
Chapter 13 bankruptcy
There are different reorganization bankruptcy types. Chapter 13 bankruptcy is the one that is used most commonly by consumers. With Chapter 13 bankruptcy, you get to keep all your property. However, you will need to make payments each month for a period of three to five years in order to repay some of your debt or even all of it.
Of course, both Chapter 13 and Chapter 7 bankruptcy are a lot more complicated and have a number of rules regarding who can file, what property you may keep and which debts are covered.
Milwaukee bankruptcy court
Milwaukee is the largest city in the state of Wisconsin. If you are a resident of Milwaukee, the bankruptcy court laws allow you to file for bankruptcy without an attorney. Even though most courts in the United States follow similar rules regarding bankruptcy, Milwaukee bankruptcy court offers specific guidance regarding local procedures.
Local rules for the Milwaukee bankruptcy court
Each court has its own regulations regarding filing procedure and how the creditor’s mailing matrix should be formatted. A creditor matrix is a list of creditors names and addresses which they often tend to be fussy about. You need to comply with process details such as filing procedures, filing date, a myriad of fees, and other bureaucratic stuff. Depending on the way they are written, whether they are written poorly or good, the court’s local rules may not make a lot of sense to you. You should not worry, however, as you may not be affected by many of these rules. You will most certainly need to, however, follow certain rules regarding filing procedure and how you should format the creditor’s mailing matrix. Milwaukee bankruptcy court publishes instruction in English for people who are filing bankruptcy without an attorney. You may want to take a look at these instructions prior to reading the actual court rules.
Bankruptcy is a very forms-intensive process, similar to doing a long tax return. Federal forms are the main forms that are used in bankruptcy and are used in bankruptcy courts all around the country, not just in Milwaukee bankruptcy courts.
Chapter 7 bankruptcy vs Chapter 13 bankruptcy
It is important to have a better understanding of the two most common bankruptcy types. Each type has its own advantages depending on the situation.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy may be filed by businesses (a business bankruptcy) or by individuals (consumer or ‘personal’ bankruptcy). A Chapter 7 bankruptcy usually does not last longer than six months.
Liquidation of property
When filing a Chapter 7 bankruptcy, some of your personal belongings (your personal property) may be sold in order to pay down parts of your debt or all of it. What you get in return is that most of your unsecured debt (debt that does not require collateral, such as most credit card debts and medical debts) is going to be erased. Any of your property that is classified as exempt cannot be sold, therefore, you get to keep it, because it is protected by state or federal laws. Such property includes your car, clothes, and other household furnishings. Many people filing for Chapter 7 bankruptcy get all of their property listed as exempt.
If the money you owe are for a secured debt, such as a car title loan, you will mostly like have the following choices: let the creditor take possession of your property to make an agreement to keep on repaying the debt without losing the property, or to pay the creditor a lump sum that is equal to the amount of the current replacement value of the property in question. There are some types of secured debt that can be eliminated when filing Chapter 7 bankruptcy.
Chapter 7 bankruptcy eligibility
Even though Chapter 7 bankruptcy is the most popular type of bankruptcy, not everyone can file for it. For instance, let’s say your disposable income is enough for funding a Chapter 13 repayment plan, you will not be allowed to file for Chapter 7 bankruptcy.
There are some kinds of debts where bankruptcy simply does not work
Even though a person is able to eliminate all kinds of debts through bankruptcy, debts such as medical bills, unsecured loans, and credit card debt, there are also many debt types, including spousal obligations, child support, and most tax debts which are impossible to eliminate with filing for bankruptcy.
Chapter 13 Bankruptcy
Because you must have a steady source of income in order to be able to repay some of your debt, Chapter 13 bankruptcy is also known as ‘wage earner’ bankruptcy.
When filing for Chapter 13 bankruptcy, you have to propose a certain repayment plan that explains in detail how you intend to repay your debt over the next three to five years. If you think you can handle a Chapter 13 bankruptcy and, therefore, you are really considering it, you may want to use a Chapter 13 plan payment calculator to get a better picture of what your minimum monthly payment will look like.
As of April 2016, a person is not allowed to have more than $394,725 in unsecured debt and more than $1,1484, 200 in secured debt.
If you have any debts that are secured, Chapter 13 bankruptcy provides you with the option to make up payments you have missed and with that, to avoid foreclosure or repossession. You may include such past due sums in your repayment plan, and over a period of time, pay them. In order to get a better understanding of the different ways how Chapter 13 may help you with secured debts, you may want to search for some home and mortgage Chapter 13 bankruptcy information.