Wisconsin Bankruptcy
Wisconsin Bankruptcy Law
Bankruptcy Code and Exemptions...
Although Federal Bankruptcy Code and U.S. Bankruptcy Laws apply to everyone, each state has its own Bankruptcy Code and Rules of Bankruptcy Property Exemption that apply specifically in that state.
Wisconsin Bankruptcy Law
Homestead Maximization...
The State of Wisconsin is one of 14 states that permits state residents to elect exemptions established under Section 522 of the federal Code. This opportunity opens alternatives that are simply not available in other states, and easily results in above average retention of property value.
In addition, the homestead exemption provided under the state version allows up to $40,000 in equity value to be retained when filing. This level of exemption value is extraordinary compared to states on the lower end of the spectrum, that permit debtors to retain as little as $3,750 for home equity.
Although Wisconsin bankruptcy law is considered progressive among states, be careful. Many new laws restrict qualification for Chapter 7, extend Chapter 13 plans, and limit the ability of judges to use a sense of fairness and discretion. These laws preempt past jurisprudence, and force all debtors nationwide to adhere to a standard drafted primarily by large credit card companies.
These new, restrictive federal bankruptcy laws have been described as draconian by bankruptcy trustees and judges alike, and create new challenges for attorneys representing debtors. Nevertheless, because of the hasty manner in which these new bankruptcy laws were enacted, many loop holes exist for astute students of the law.
Wisconsin Exemptions
Lien Attachment to Wisconsin Bankruptcy Exempt Property...
One of the most perplexing aspects of lien practice concerns the attachment of statutory liens. Wisconsin bankruptcy exemptions are vulnerable to lien attachment at all times before filing. In general, in a liquidation case, unsecured debts are discharged routinely. Secured creditors remain protected to the extent of their lien as covered by collateral value. Yet a third class of creditor, the protected class that enjoys statutory lien status, may intercede and claim priority status.
For example, consider medical expenses accumulated during a workers compensation case. If the injury was caused by the negligence of a third party, the hospital who provided initial emergency care, and the insurance carrier who paid weekly benefits, are both covered by statutory liens against all third party causes of action. Because personal injury causes of action are exempt up to the extent required for support, the Wisconsin bankruptcy exemption may nevertheless be defeated, and proceeds denied to the injured party until the insurance company and hospital are repaid in full.
Avoiding Wisconsin Statutory Lien Attachments...
The attachment of a statutory lien is prohibited by the terms of Title 11, Section 545, at all times after a case is filed under any chapter of the Code. To avoid the lien however, the trustee must file a motion to avoid liens and receive court approval. More importantly, the affixing of a statutory while a debtor is insolvent may also be avoided, which extends the prohibition to a point in time before a case is filed. The resulting opportunity, as applied to the example above, may allow the debtor to withhold payment upon statutory liens and retain the Wisconsin bankruptcy exemption intact.
Pre-Bankruptcy Planning and Preparation
Pre-bankruptcy planning is a delicate topic with many transactions prohibited, but with the assistance of a progressive bankruptcy attorney, other allowable exemptions may be identified.
In practice, most people who file for bankruptcy will actually improve their credit rating within 18 months or less. In fact, in a chapter 13 filing, credit will begin to improve once late payment reports stop, and secured loans and credit lines begin reflecting timely payments.
Overall, filing for bankruptcy can, for many Americans in many different circumstances, be an important and integral step toward financial recovery and new found fiscal stability. Ultimately, bankruptcy creates opportunities and improves net worth, so long as the decision to file was made wisely.
To learn more about Wisconsin State Bankruptcy Exemptions, simply go to our U.S. Bankruptcy Exemptions page.
In most states you can legally protect your personal residence in a bankruptcy. The interesting thing is homeowners are treated differently from state to state.
Learn more about the Homestead Act and how it affects you.
Wisconsin Bankruptcy Code
All Wisconsin Bankruptcy cases are governed by Title 11 of the United States Bankruptcy Code, by U.S. Bankruptcy Rules, and by local Wisconsin State Bankruptcy Rules promulgated by Wisconsin court.
The US bankruptcy court websites generally have links to both, the Federal US Bankruptcy Rules and specific Wisconsin Bankruptcy Code. Clerks in the bankruptcy courts will not give debtors, or even attorneys for debtors, legal advice, including advice about which bankruptcy rules apply to a given case.
Locate a US Bankruptcy Court in your federal judicial district.
Since US Bankruptcy Code and Wisconsin Bankruptcy Rules are very technical, and since the case load in the US Bankruptcy Courts makes judges very unforgiving of mistakes or missed deadlines, it's highly recommended to seek the advice of an experienced Wisconsin Bankruptcy Attorney and Certified Credit Counsellor.
The most recent Changes to the Bankruptcy Code and Bankruptcy Rules came about on April 20, 2005 as President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act. This new Bankruptcy Law came into effect October 17, 2005.
Learn more about the 25 Most Recent Changes to Personal Bankruptcy Law and how they affect you.
