This article will discuss Frequently Asked Questions regarding Chapter 7 Bankruptcies in Wisconsin.
What is a Chapter 7 Bankruptcy?
There are several chapters that make up the Bankruptcy Code. Chapter 7 is the chapter of the code that focuses on a liquidation of debt. Whatever property is not exempt may be collected and sold by the appointed trustee to pay creditors. In exchange for this, the court discharges certain types of debts. An Important factor to note is that neither Wisconsin State law nor the Bankruptcy code itself allows for Corporations or partnerships to receive discharges.
What is the Cost of Filing a Chapter 7 bankruptcy in Wisconsin?
The filing fee for a Chapter 7 is $338.00
Who qualifies for Chapter 7 Bankruptcy?
You must qualify under the means test for a chapter 7 bankruptcy in Wisconsin. If you make under $84,952 a year, you may qualify. If the circumstances are met, individuals, partnerships, and corporations may all qualify under the code.
How do I file a Chapter 7 bankruptcy in Wisconsin?
You have to take a pre filing credit counseling class and obtain a certificate. Once you have that certificate, you must complete a petition indicating the specific chapter you are filing as well as the exemptions you plan to use. This petition will require all your debts, assets, and liabilities to be listed. The petition will also require information necessary to identify and notify your creditors.
Do I need a lawyer for a Chapter 7 bankruptcy in Wisconsin?
While its legal to file a petition “pro se” it is not recommended. Wisconsin is a state that allows for both Federal and State benefits to be taken advantage of. In a Chapter 7 petition, if you fail to cover your property with an exemption, you risk having that property seized by the trustee as stated above. Considering Chapter 7 is the opportunity for a “fresh start” it is best to get it right. If something is filed incorrectly or inaccurately or if a document is missing, you risk paying more for the process and possibly an investigation by the Department of Justice. These are federal proceedings and should be taken serious, the assistance of an attorney would be best practice.
What is the Means Test for the Chapter 7 Bankruptcy?
As part of your petition you will be required to enter income and expense information onto the appropriate forms, the 122A Forms or the 122C Forms, and then make calculations using the information entered. This information will determine your eligibility and serve as an exemption over the presumption of abuse. The form will ask for current monthly income, and all the evidence required for it comes from your own personal records.
What are the Chapter 7 Bankruptcy forms?
Here is a list of the forms you need in order to file bankruptcy:
- Form 101 - Voluntary Petition for Individuals filing for Bankruptcy
- Mailing Matrix - List of all creditors
- Form 121 - Statement of Social Security Number
- Certificate of credit counseling pre and post filing ( 2 certificates total)
- Form 119 - Bankruptcy Petition Preparer's Notice, Declaration, and Signature
- Form 2800 - Disclosure of Compensation of Bankruptcy Petition Preparer
- Form106 Sum - Summary of Assets and Liabilities and Certain Statistical Information
- Form 106A/B - Schedules A/B
- Form 106C - Schedule C
- Form 106D - Schedule D (NOTE: Schedule D must include full recording data: page and document numbers, date and place of recording, or state "unrecorded" - attach separate page if necessary)
- Form 106E/F - Schedule E/F
- Form 106G - Schedule G
- Form 106H - Schedule H
- Form 106I - Schedule I
- Form 106J - Schedule J
- Form 106Dec - Declaration About an Individual Debtor's Schedules
- Declaration Regarding Electronic Filing
- Form 107 - Statement of Financial Affairs
- Form 108 - Statement of Intention for Individuals Filing Under Chapter 7
- Form 2030 - Disclosure of Compensation of Attorney for Debtor
- Form 122A-1 - Statement of Current Monthly Income
- Form 122A-1Supp - Statement of Exemption from Presumption of Abuse under Section 707(b)(2)
- Payment Advices Cover Sheet with copies of all payment advices (pay stubs) or other evidence of payment received by the debtor from an employer within 60 days before filing the petition, if any.
- Provide to the trustee a copy of the Federal income tax return
What is a Chapter 7 bankruptcy Discharge?
A discharged debt under Chapter 7 bankruptcy means you do not have to pay that debt. Discharged debts essentially get wiped out by the court order. Not all debts are dischargeable. Spousal and child support obligations and most tax debts are not dischargeable. Secured debts are an important topic when navigating bankrtupcy.
How long does a Chapter 7 Bankruptcy last?
Your debts are discharged permanently. If your debt is discharged, you are not able to seek another discharge through Chapter 7 or Chapter 11 bankruptcy for 8 years.
How long does a Chapter 7 Bankruptcy stay on your credit report?
The Fair Credit Reporting Act, Section 60.states that credit reporting agencies may not report a bankruptcy case on a person’s credit report after ten years from the date the bankruptcy case is filed. The only thing to keep in mind is that you may have to enforce this yourself as the bankruptcy court does not have jurisdiction over Credit agencies and does not have a duty to actively enforce this regulation.
How long does Chapter 7 Bankruptcy take?
Once you have entered your petition, you will receive a hearing date approximately 40-45 days out. After this 341 hearing, you should receive your discharge within 60 days. The process is short and painless if we are able to collect all of the information from the start.
Can I use Chapter 7 bankruptcy for my Business in Wisconsin?
If you are a corporation or partnership, you may file but not take full advantage of the discharges. If your business is a sole proprietorship then your personal bankruptcy filing will certainly assist you. In Wisconsin, your business will be listen in your petition as a DBA or “doing business as.” If you own a business that is a partnership or corporation you may have to take a look at the other chapters.
What Happens after the Chapter 7 Bankruptcy?
For one your creditors will no longer be legally allowed to contact you. Peace of mind should be the first thing that happens once you have filed your petition correctly. With the right attorney this peace of mind will carry you into the 341 meeting with the Trustee. Here the trustee will ask some identifying questions to make sure you are who you say you are, and they will confirm the accuracy of your petition. Once that is completed and you have submitted your second credit counseling course you are done. If any of your creditors call or harass you during the automatic stay or after your debt has been discharged, there may be legal actions you can take.
As you can see these cases can be complicated and do carry long lasting consequences. By hiring our firm, you are hiring attorneys that will advise you on best practices and guide you towards the best path. If you have any questions, please give us a call.
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