Do you use credit cards to pay your bills but are not able to make yourpayments on time?

Do you have debts piled up so high, that you are unable to keep track of it?

Are your bill collectors calling you frequently threatening to take action against you unless you pay up?

If you have answered yes for any of the above, you need to take immediate action. Unless you are just lazy and can’t be bothered to make your payments on time, you are most certainly in a financial crunch and need to be bailed out.

What is Bankruptcy?

Bankruptcy is a legal proceeding where an individual or a business is helped by the federal court, to pay up their debts. The bankrupt party is protected by the court during the proceedings. The debts can either be paid off or even wiped out depending on their nature.

Options for Filing Bankruptcybankruptcy attorney

Bankruptcies are generally categorized into liquidations and reorganisations. There are various chapters under which one can file for bankruptcy. One can take the means test to find out if they qualify for filing bankruptcyand if they do- which chapter to file it under.

Chapter 7

Chapter 7 bankruptcy falls under the liquidation category, where some of the property of the bankrupt person/ business is confiscated and sold to repay the debts. Property such as clothes, furniture and car are exempt under the federal laws but these exemptions vary from state to state. When your seized property has an outstanding loan on it, the value of that property is reduced by the amount of loan on it. (For ex: if your TV is worth $1,000 and has an outstanding loan to the tune of $300, the TV is only worth $700 and the $300 is one of the debts to be paid off from the sale proceeds)

Chapter 13

Chapter 13 Bankruptcy falls under the reorganisation category and is also known as the “wage earner” bankruptcy where in the person/ business filing for it must have a reliable source of steady income. One who files for this type of bankruptcy must work with the court to come up with a plan to repay the debts within the next 3-5 years, and must necessarily stick to the plan.

Chapter 11

For those who want to continue their business but avoid liquidation, Chapter 11 Bankruptcy is an option. Here the debts are adjusted by either reducing it or extending the credit period.

Chapter 12

Chapter 12 Bankruptcy was brought in to help struggling farmers who have a high income that disqualifies them for Chapter 13 but do not have enough time for filing Chapter 11. To qualify for Chapter 12 Bankruptcy, 80% of the debts must be arising from a family farm.Benefits


Having made one of the toughest decisions of life, to file for bankruptcy, it is important to know that you could benefit from this decision in a number of ways. Some of them are:

  • It stops your creditors from taking any action against you for not paying up. They cannot send you notices or try to seize your assets even if provided as collateral
  • It freezes the interest charges on your credit cards, loans and other debts, thereby effectively stopping your debts from growing further
  • Though bankruptcy stays in your files for a solid 10 years, if you file under chapter 7, you will be relieved from your debts within the next 6 months
  • It can erase off your old tax liabilities and certain other debts if the court is convinced with your petition
  • If you obtain a Chapter 13 discharge under good faith by paying off more than 70% of your debts, you can file for a Chapter 7 bankruptcy within the stipulated 6 years, if needed.
  • The sooner you file for bankruptcy, the sooner you are given a chance to re build your life and learn from your mistakes
  • You needn’t necessarily part ways with all your belongings. Under Chapter 13, you are given a plan to repay your debts which doesn’t involve liquidating your assets
  • When you are bankrupt, not everyone will be willing to buy your assets to help you pay your debts, but when you file that petition and the court approves, you have a trustee who will take over the selling and repaying responsibilities
  • When the court gives you a plan to follow under Chapter 13, you are guided to make your payments and to manage your expenses within a budget
  • At the end of this turmoil, all your debts would be cleared off, apart from those that are exempted
  • It makes you come to terms with reality and prioritize your expenses
  • It gives you a second chance to do things differently


Alternate to Bankruptcy

Under the Wisconsin Law, if you file for Chapter 128, you can pick and choose your most troublesome debts and have it paid off over 36 equal monthly payments. This protects you from your creditors taking any action against you, your interests and penalties are frozen as well.


Always Hire A Lawyer

It is best to go to a lawyer who specializes in bankruptcy. He will be able to guide you as to if you should really file for bankruptcy or if you have other options. If filing for bankruptcy is your best option, your lawyer will be able guide you under which chapter to file it.Milwaukee has a number of attorneys to help you right from identifying the problem, to getting that petition approved. Find Milwaukee Bankruptcy Attorney Office Locations – Debt Advisors.

Yes filing for bankruptcy can be very difficult as you have to declare to the world, that you have no funds and you have possibly made some bad investments. But taking this step at the right time can save you from a lot more debts and help you even erase your previous debts to make a fresh start; in both your business and in life.