Helbing Law Office, LLC Blog

Debt, Bankruptcy, and the Laws that Govern Them

Thu, 16 Apr 2026 12:32:29 GMT

Debt can build slowly or arrive all at once after job loss, illness, divorce, business trouble, or a major financial setback. What starts as a few overdue balances can turn into collection calls, lawsuits, wage concerns, and growing stress at home. That is why it is helpful to understand not only how debt works, but also how the legal system addresses it. Bankruptcy is one of the legal tools available to people and businesses facing serious financial pressure, but it operates within a detailed system of federal laws, court procedures, and filing requirements.

For many individuals, confusion about the process can make financial challenges feel even more overwhelming. Questions about eligibility, timelines, and long-term consequences often prevent people from exploring their options. Taking time to learn how the law applies to different types of debt and financial situations can make it easier to move forward with a clearer plan and greater confidence.

Understanding Debt Obligations

Before looking at the legal process, it helps to understand what debt actually includes. Consumer debt may involve credit cards, personal loans, medical bills, auto loans, mortgages, tax obligations, and past-due utility accounts. Some debts are secured by property, which means a lender may have rights tied to a car, house, or other asset. Others are unsecured, which usually means the creditor does not have collateral but may still pursue payment through collections or litigation.

The type of debt matters because different rules apply to different obligations. A mortgage lender may have foreclosure rights, while a credit card company may need to sue before trying to collect through wage garnishment or bank levies, depending on state law. Student loans, child support, alimony, and certain tax debts are also treated differently from ordinary unsecured balances. Knowing the category of a debt can shape the legal options available and can affect how quickly financial pressure increases.

Reviewing Federal Law and Court Procedures

The primary law that governs bankruptcy in the United States is the federal Bankruptcy Code, which is found in Title 11 of the United States Code. Although these cases are handled in federal court, local rules and procedural requirements often vary by district. Filers must usually complete petitions, schedules, statements of financial affairs, and other supporting documents that give the court and the trustee a detailed picture of assets, liabilities, income, expenses, and recent financial activity. Accuracy in these documents is critical, as errors or omissions can delay the process or raise additional legal concerns.

This process is not only about listing debts. The court also looks at whether the filer has been candid, whether transfers or payments were made before filing, and whether the case fits the chapter selected. In many situations, a trustee is appointed to review the filing, ask questions, and administer parts of the case. Even though the law is federal, state law can still matter because it often affects property rights, exemptions, garnishment limits, and creditor remedies outside the court process. Understanding how these layers of law interact can help individuals better prepare for each stage of the case.

Comparing Filing Chapters

Not every case follows the same path. Chapter 7 is often used by individuals who need relief from qualifying unsecured debt and who meet the applicable means test or other eligibility standards. Chapter 13 is structured around a repayment plan, often lasting three to five years, and may be used by people who have regular income and need time to catch up on certain obligations while protecting important property. Businesses may also use other chapters depending on size, goals, and operations.

According to Nolo, about three to four months after filing, Chapter 7 bankruptcy eliminates qualifying debts, including credit card balances, medical bills, and personal loans. This timeline can provide relatively quick relief for individuals who meet the requirements for this type of filing. It also highlights how the process is structured to address certain unsecured debts within a defined period rather than continuing indefinitely.

Protecting Property Through Exemption Laws

One of the biggest concerns people have is whether they will lose everything they own. In many cases, that fear does not match how the law actually works. Exemption laws protect certain property from being taken for the benefit of creditors, though the available exemptions differ depending on the jurisdiction and the rules that apply to the case. These protections may cover a portion of home equity, household goods, clothing, retirement accounts, tools used for work, and sometimes vehicles or cash.

The availability of exemptions is one reason legal advice matters. The same asset may be treated very differently depending on its value, how it is titled, whether liens exist, and which exemption scheme applies. Timing can matter too, especially when someone is considering selling property, transferring ownership, or using savings to pay particular creditors before filing. A well-prepared case looks closely at assets and exemption rights before any paperwork is submitted.

Managing Collection Pressure and Court Protection

One major effect of a bankruptcy filing is the automatic stay, which generally stops many collection efforts as soon as the case begins. This can pause lawsuits, collection calls, garnishments, repossessions, and other creditor actions, at least for a period of time. For many people, that immediate relief is one of the most important parts of the process because it creates room to regroup and evaluate the next steps under court supervision.

Still, the automatic stay is not unlimited. Certain actions may continue, and some creditors can ask the court for permission to move forward despite the filing. Domestic support matters, some tax issues, and criminal proceedings may also fall outside its protection. In addition, if someone has filed repeated cases within a short period, the scope of that protection may be reduced. The court process can offer breathing room, but it does not erase every obligation or stop every legal matter in its tracks.

Planning for Financial Life After Filing

Debt relief through bankruptcy is not just about ending collection activity. It is also about creating a more stable path forward after the case is over. That may involve rebuilding credit, making regular payments on ongoing obligations, reviewing spending habits, and avoiding the same patterns that led to financial distress in the first place. Many filers also complete a required financial management course, which is intended to support better decision-making after the case closes.

The long-term impact depends on the facts of each case. Some people recover faster because they no longer carry large unsecured balances or constant collection pressure. Others need time to rebuild because of income limitations, missed mortgage payments, or related legal disputes. A filing can be a turning point, but it works best when paired with a realistic plan for housing, transportation, credit use, and household budgeting. Understanding the legal rules is only part of the picture. Applying them wisely is what helps people move ahead with greater confidence.

Debt problems can feel overwhelming, but the law provides structured options for people who need relief and a way to move forward. When you understand how courts, exemptions, repayment plans, creditor protections, and filing requirements work together, it becomes easier to make informed decisions about your next step. Bankruptcy is a serious legal process, but it can also offer a path toward stability when handled carefully and with the right guidance. If you are dealing with serious debt and want to learn more about your legal options, contact Helbing Law Office, LLC today.

Ask Your Bankruptcy Lawyer: What Are the Key Differences Between Chapter 7 and Chapter 13 in Filing Bankruptcy?

Thu, 19 Feb 2026 02:03:24 GMT

Filing for bankruptcy is a complex and often stressful decision that requires careful consideration of both legal and financial factors. Choosing between Chapter 7 and Chapter 13 significantly impacts how debts are handled and shapes a person’s path to financial recovery. Each type of bankruptcy offers distinct approaches, from debt liquidation to structured repayment plans. For individuals facing overwhelming debt, understanding these differences is essential for making informed choices and setting the stage for a fresh financial start. Consulting a knowledgeable bankruptcy lawyer can provide guidance tailored to your situation and ensure the right chapter is chosen for your needs.

Eligibility Criteria

Chapter 7 bankruptcy, often called liquidation bankruptcy, is available to individuals who pass a means test. This test compares your income against your state’s median income to determine eligibility. Those with incomes below the median usually qualify, while higher-income earners may need to consider Chapter 13. Passing the means test ensures Chapter 7 is reserved for those genuinely unable to repay debts.

Applicants must submit comprehensive financial documentation, including income, expenses, and assets. Accurate reporting is critical, as incomplete or false information can result in denial of relief. Exceptions may apply for those with business debts or recent income loss, making legal guidance from a bankruptcy lawyer essential for navigating eligibility complexities. According to Nolo, Chapter 7 is a popular choice because, unlike Chapter 13, it doesn’t require filers to pay back debts.

Process Overview

Filing Chapter 7 begins with submitting a bankruptcy petition to the court, which includes detailed schedules of assets, liabilities, income, and expenses. Once filed, an automatic stay halts most collection activities by creditors. A court-appointed trustee reviews the case and oversees the liquidation of non-exempt assets. Debtors attend a meeting of creditors, providing testimony on financial matters, while the trustee ensures all information is accurate.

The typical Chapter 7 timeline is four to six months, making it one of the fastest paths to financial relief. Working closely with a bankruptcy lawyer ensures proper preparation, smooth coordination with the trustee, and minimal delays. Understanding each step—from filing to discharge—is critical for a successful and efficient resolution.

Asset Liquidation

In Chapter 7, certain assets may be sold to pay creditors. Exemptions protect essential personal property, such as basic household items, clothing, and a primary vehicle. Most cases are “no-asset” cases, meaning few if any assets are liquidated.

Secured debts like mortgages or car loans may require reaffirmation agreements if you wish to retain the collateral. A bankruptcy lawyer can help negotiate these agreements and maximize exemptions, ensuring essential property is preserved while resolving unsecured debts.

Impact on Debts

Chapter 7 discharges most unsecured debts, including credit cards, personal loans, and medical bills. Obligations like student loans, taxes, or child support typically remain. Secured debts are not automatically discharged, requiring careful decisions on surrendering or reaffirming property.

Working with a bankruptcy lawyer helps evaluate these options to minimize risk and ensure a clear path to financial recovery. The ultimate goal of Chapter 7 is to provide a fresh start, eliminating overwhelming debts while retaining key protections for the debtor.

Duration and Timeline

Chapter 7 cases are generally resolved in four to six months, though factors like asset liquidation or creditor objections can extend the timeline. A well-prepared petition and accurate documentation streamline the process.

Bankruptcy lawyers ensure all paperwork is complete and coordinate with trustees to avoid delays. The relatively swift discharge in Chapter 7 allows debtors to rebuild their financial life more quickly than Chapter 13, making it a preferred option for those seeking rapid relief.

Eligibility Requirements

Chapter 13 is designed for individuals with regular income who can repay debts over time. Debtors must demonstrate sufficient income to comply with a court-approved repayment plan, which typically lasts three to five years. Unlike Chapter 7, Chapter 13 allows individuals to retain assets while restructuring debt.

Eligibility also protects homeowners from foreclosure by incorporating missed mortgage payments into the plan. Consulting a bankruptcy lawyer is critical to ensure all eligibility criteria are met and that the repayment plan is viable and legally compliant.

Repayment Plan Structure

The core of Chapter 13 is the repayment plan, which organizes debts into manageable monthly payments distributed by a bankruptcy trustee. The plan is based on income, expenses, and debt priorities. Court approval ensures feasibility and creditor satisfaction.

A bankruptcy lawyer can help design a realistic plan that protects essential assets, accommodates secured debts, and aligns with long-term financial goals. Successful adherence leads to the eventual discharge of remaining unsecured debts.

Role of the Bankruptcy Trustee

The trustee oversees compliance, reviews financial disclosures, and monitors payments to creditors. Regular meetings and communication with the trustee are required throughout the repayment period.

Bankruptcy lawyers guide clients in presenting accurate information, responding to trustee inquiries, and making any necessary plan modifications. Effective collaboration ensures compliance, minimizes disputes, and facilitates a successful Chapter 13 discharge.

Protections Granted

Chapter 13 provides significant protections, including the automatic stay that halts collection efforts upon filing. Debtors maintain ownership of property, safeguard homes from foreclosure, and avoid wage garnishments or repossessions.

The structured repayment plan promotes financial discipline, reducing unpredictability and supporting long-term stability. A bankruptcy lawyer ensures these protections are fully leveraged to achieve the best possible outcome for clients.

Plan Completion and Discharge

Completing the Chapter 13 plan involves consistent payments over three to five years. Successful adherence results in the discharge of remaining unsecured debts, offering substantial financial relief.

Bankruptcy lawyers help navigate plan modifications if life circumstances change, ensuring the repayment structure remains feasible. Discharge marks a fresh financial start, allowing individuals to rebuild credit and secure long-term financial stability.

Key Financial Differences

Chapter 7 offers immediate debt relief through liquidation and discharge, while Chapter 13 spreads repayment over several years, preserving assets. Choosing the right option depends on income, asset retention goals, and personal financial circumstances.

A bankruptcy lawyer can analyze your unique situation, weighing the advantages of swift debt elimination versus structured repayment, and advise on the most suitable chapter.

Impact on Credit Score

Both Chapter 7 and Chapter 13 affect credit scores. Chapter 7 remains on credit reports for up to ten years, whereas Chapter 13 typically stays for seven years. While Chapter 7 may result in a sharper initial drop, Chapter 13 allows gradual improvement through consistent repayments.

Legal guidance from a bankruptcy lawyer ensures strategies for post-bankruptcy credit rebuilding are integrated, minimizing long-term financial impact.

Influence on Future Financial Planning

Bankruptcy, whether Chapter 7 or Chapter 13, requires reassessment of spending habits, budgeting, and risk management. Debtors are encouraged to build emergency funds, save strategically, and adopt disciplined financial behaviors.

Bankruptcy lawyers can provide tools and advice for post-discharge planning, helping clients avoid future financial pitfalls and maintain sustainable economic health.

When Chapter 7 or Chapter 13 Makes the Most Sense

Determining whether Chapter 7 or Chapter 13 is the better option depends heavily on a debtor’s financial situation, income stability, and long-term goals. Chapter 7 is often better suited for individuals with limited income, minimal assets, and primarily unsecured debt. It allows for a faster discharge and eliminates qualifying debts without a repayment obligation, which can be ideal for those who need immediate financial relief. A bankruptcy lawyer can evaluate whether the means test applies and assess the risk of asset liquidation before filing.

Understanding the distinctions between Chapter 7 and Chapter 13 is essential for anyone considering bankruptcy. Chapter 7 provides rapid relief through debt discharge, while Chapter 13 allows asset retention and structured repayment. Both pathways offer opportunities for financial recovery, but navigating eligibility, asset protection, and repayment options requires expertise.

Working with a bankruptcy lawyer ensures informed decisions, adherence to legal requirements, and maximized protections throughout the process. For personalized guidance and support in choosing the best course for your financial future, contact Helbing Law Office, LLC today.

The Benefits of Working with a Local Law Office

Mon, 15 Dec 2025 13:45:15 GMT

Choosing to work with a local law office can offer numerous advantages to clients that extend beyond the usual scope of legal services. Local law offices often provide personalized and adaptable approaches tailored to meet the specific needs and circumstances of their clients. This connection not only benefits the individual but also contributes positively to the community by building trust and fostering local business. In this article, we will explore the multifaceted benefits that come with partnering with a local law office, highlighting the personalized attention, in-depth knowledge of local laws, community connection, cost-effectiveness, accessibility, and ethical commitment they provide. By the end of this exploration, it will be clear why choosing a local law office can be a wise and beneficial decision.

1. Personalized Attention

1.1 Understanding Client's Unique Context

Local law offices have a significant advantage in understanding the unique context of their clients. These offices often have existing relationships and a deep understanding of the community, allowing them to grasp individual client circumstances more accurately. This understanding is vital for tailoring legal advice and strategies that align with the client's specific needs and context. Moreover, personalized attention translates into a more empathetic and thorough understanding of client issues, leading to tailored solutions. By being grounded in the local environment, attorneys can respond quickly to emerging concerns and offer recommendations that reflect real-world community dynamics.

1.2 Building Strong Client-Attorney Relationships

Relationships in local law offices often go beyond mere transactions, developing into strong, trust-based partnerships. Local attorneys tend to create an environment conducive to open communication and mutual respect, which fosters long-term relationships. This trust is crucial, as clients often feel more at ease when they can discuss sensitive matters with someone who understands their personal and professional spheres. Furthermore, these relationships motivate attorneys to advocate more passionately for their clients. The familiarity built over time encourages collaborative planning, ensuring that legal approaches remain aligned with client goals.

1.3 Tailored Legal Strategies

A key benefit of working with a local law office is receiving tailored legal strategies that reflect the client's unique circumstances. Because local attorneys know their community's legal landscape intimately, they can craft strategies that address specific challenges effectively. This individualized approach stands in contrast to larger firms that may rely on generalized methods. Tailored legal plans empower clients to play an active role in shaping their outcomes, contributing to greater clarity and satisfaction. Clients can trust that their representation reflects thoughtful, case-specific analysis rather than formulaic solutions.

1.4 Direct Communication Channels

Local law offices offer the advantage of direct communication channels, which facilitate more efficient interactions between clients and attorneys. Unlike larger firms with multiple layers of communication, local offices allow straightforward access to legal professionals, reducing delays and misunderstandings. Prompt response times improve transparency and keep clients informed throughout their cases. This access also fosters a supportive environment where clients can ask questions freely and gain deeper insight into their legal situation. Ultimately, direct communication strengthens trust and boosts overall client confidence.

1.5 Regular Updates and Meetings

Working with a local law office often results in more frequent updates and in-person meetings. Clients can stay consistently informed about the status of their case, contributing to peace of mind and better participation in decision-making. Routine check-ins allow attorneys to modify strategies efficiently when necessary, ensuring every detail receives proper attention. This proactive approach helps prevent oversights and reinforces a shared commitment to achieving the best possible outcome. Clients benefit from a collaborative dynamic built on communication and reliability.

2. In-Depth Knowledge of Local Laws

2.1 Specialized Understanding of Local Regulations

One of the greatest advantages offered by local law offices is their specialized knowledge of local regulations and statutes. Local attorneys understand the nuanced differences between state, municipal, and regional legal requirements, which allows them to offer highly accurate guidance. Such insight becomes critical when navigating zoning issues, business compliance, or community-specific disputes. This depth of understanding helps clients avoid missteps and positions them for more favorable results. Their localized experience ensures legal strategies align with actual regulatory expectations.

2.2 Familiarity with Local Courts and Judges

Local attorneys hold a significant advantage due to their familiarity with local courts and judges. Their understanding of court procedures and judicial preferences offers invaluable insight when preparing a case. This awareness allows attorneys to tailor their submissions and strategies, potentially increasing the likelihood of a successful outcome. Knowledge gained through regular interaction with local courts enhances efficiency and reduces procedural delays. Clients ultimately benefit from representation informed by firsthand experience within the judicial environment.

2.3 Knowledge of Local Legal Trends

Understanding local legal trends is essential for any attorney striving to deliver quality representation. Because local law offices operate within the communities they serve, they stay informed about patterns that may affect clients. For example, according to ABI, commercial Chapter 11 filings have decreased while individual filings have increased-information that can shape strategic advice. By remaining attuned to such shifts, attorneys can anticipate changes and help clients prepare accordingly. This trend awareness contributes to a dynamic, proactive approach to legal representation.

2.4 Regional Precedent Awareness

Local attorneys benefit from a deep awareness of regional precedents, which can significantly influence case outcomes. Understanding how similar cases have been decided provides attorneys with a strategic advantage when formulating arguments. This knowledge extends beyond theoretical training, offering practical insight rooted in the history of local rulings. By framing legal strategies within the context of relevant precedents, attorneys strengthen their clients' positions. Clients gain a distinct advantage from counsel informed by real-world regional legal patterns.

3. Community Connection

3.1 Building Community Trust

Local law offices inherently build trust within their communities, establishing themselves as reliable and supportive partners. This trust is cultivated through consistent service, positive client experiences, and active involvement in community events. Being deeply rooted in the local environment instills a sense of accountability that strengthens client confidence. Over time, this reliability enhances a firm's reputation and encourages long-term relationships. Clients appreciate knowing they are represented by members of their own community who value ethical stewardship.

3.2 Supporting the Local Economy

Utilizing a local law office contributes directly to the economic health of the community. Clients who choose local attorneys help support small businesses, which encourages job growth and economic stability. This reinvestment fuels a thriving community environment, benefitting residents and business owners alike. Local economies flourish when residents choose to work with nearby professionals, creating a positive cycle of mutual support. In this sense, selecting local legal services becomes both a personal and community investment.

3.3 Networking with Local Professionals

Local attorneys often maintain extensive networks with professionals across industries, which can offer significant benefits to clients. Whether clients require referrals to financial experts, real estate specialists, or business consultants, these networks provide valuable resources. Collaboration among community professionals strengthens the support system available to clients. By partnering with a local firm, clients gain access to a broader ecosystem designed to address complex challenges. This interconnected support enhances both efficiency and client satisfaction.

Many local law offices actively engage in community initiatives, charitable events, and local governance efforts. Their participation demonstrates a commitment to improving the quality of life around them, extending their influence beyond legal services. This involvement fosters goodwill and strengthens their connection with the community. Clients can feel confident that their attorneys share a genuine investment in local development. Such engagement further reinforces trust and supports meaningful professional relationships. Contact our team at Helbing Law Office, LLC today and get connected with a reliable law office .

The Role of Bankruptcy Attorneys in Navigating Debt Relief

Fri, 07 Nov 2025 15:50:37 GMT

In today’s economy, even the most responsible people can find themselves facing overwhelming debt. Layoffs, medical emergencies, or unexpected business downturns can unravel financial security almost overnight. That’s where understanding bankruptcy law becomes critical—and where bankruptcy attorneys become invaluable partners in finding relief. At its core, bankruptcy is a legal process designed to give debtors a fresh start. It allows individuals or businesses to either eliminate or reorganize debt under the protection of the federal court system. Yet, it’s far from simple. There are strict rules, deadlines, and eligibility standards that vary by bankruptcy type.

The two most common forms of consumer bankruptcy are Chapter 7 and Chapter 13. Chapter 7—often called “liquidation”—allows the sale of certain assets to pay off creditors, wiping out most unsecured debts. Chapter 13—known as “reorganization”—lets individuals keep their property while repaying part of their debts through a structured plan. Eligibility for either chapter depends on income, debt type, and financial history. Here’s where professional help truly matters: bankruptcy attorneys help clients determine which option best fits their situation. They explain what debts can and cannot be discharged, how exemptions protect property, and how the process will affect future credit.

Assessing Financial Situations and Planning Strategy

Before any paperwork is filed, a thorough financial assessment sets the stage. Bankruptcy attorneys begin by gathering key details—income, assets, expenses, outstanding loans, and legal obligations such as taxes or child support. From there, they develop a filing strategy tailored to each client’s goals. Some people need immediate relief from wage garnishment; others want to prevent foreclosure or repossession. A skilled attorney evaluates each priority and designs an approach that maximizes protection.

Not everyone who feels overwhelmed by debt must file for bankruptcy. Attorneys explain other routes like debt settlement, consolidation, or negotiation. But if bankruptcy is the most logical option, they outline exactly how it will unfold. The best part? Clients don’t feel rushed or judged. A good bankruptcy attorney listens first, clarifies second, and strategizes third—because understanding the “why” behind filing helps ensure the process aligns with personal and financial goals.

Preparing Filings and Meeting Legal Requirements

Filing for bankruptcy means more than just signing a few papers. The law demands extensive documentation—income statements, tax returns, asset lists, debt ledgers, and proof of credit counseling. A single error can delay or even dismiss a case. That’s where bankruptcy attorneys’ procedural expertise shines.

They make sure every document meets the strict requirements of the U.S. Bankruptcy Code. They verify that clients complete mandatory pre-filing credit counseling and post-filing debtor education courses. They also ensure all debts are disclosed honestly—concealing even small ones can have major legal consequences.

Timing also plays a big role. According to Debt.org, waiting periods typically range from two to eight years, depending on the type of bankruptcy and the order in which they are filed. Filing too soon after a prior bankruptcy can make you ineligible for discharge, meaning you’d go through the entire process without relief. Skilled attorneys calculate those timelines precisely so clients file only when the law allows. Filing is both a legal and emotional milestone. Most people describe it as a mix of anxiety and relief—a recognition that while bankruptcy is serious, it’s also a chance to start over.

Representing Clients and Managing Court Proceedings

Once the case is filed, the courtroom becomes part of the journey. Bankruptcy involves hearings, meetings, and potential challenges from creditors. This is when bankruptcy attorneys truly step into their advocacy role.

They represent clients in the meeting of creditors where a court-appointed trustee reviews the case. It’s a crucial step: creditors can question the debtor, and the trustee verifies that all paperwork is accurate. Having an attorney present ensures clients don’t feel intimidated or say something that could hurt their case.

Sometimes disputes arise. A creditor may object to a debt being discharged or argue that property should be sold to pay what’s owed. In these moments, attorneys act as defenders—negotiating settlements, filing motions, and ensuring the client’s legal rights remain protected.

If litigation becomes necessary, attorneys handle hearings and appeals, navigating the complex web of bankruptcy court procedures. Their presence also discourages creditor harassment; once a lawyer is involved, all communications must go through them, giving clients space to breathe and rebuild confidence. In short, representation is more than paperwork—it’s protection, advocacy, and peace of mind.

Guiding Post-Bankruptcy Recovery and Financial Rebuilding

A bankruptcy discharge isn’t the end—it’s the beginning of a rebuilding phase. After the case closes, clients often feel unsure about what comes next. How soon can they get credit again? What steps should they take to rebuild a positive financial history?

Here’s where bankruptcy attorneys continue to guide. They explain which debts are officially wiped out and which remain, such as student loans or certain taxes. They also help clients interpret discharge orders correctly to prevent future collection attempts.

Post-bankruptcy recovery involves smart financial habits—paying bills on time, using secured credit cards, and saving consistently. Attorneys may refer clients to credit counselors or financial advisors for ongoing support. They also help interpret how long bankruptcy will appear on credit reports and what impact it may have on major purchases like homes or cars.

Attorneys who stay engaged after discharge often see clients rebuild faster. They remind clients that bankruptcy is not a personal failure but a legal tool for recovery. With careful planning, credit scores can improve, savings can grow, and financial freedom can become reality again.

Collaborating With Financial Professionals and Credit Counselors

Legal guidance and financial planning go hand in hand. The best outcomes often happen when bankruptcy attorneys work closely with financial professionals to support long-term recovery.

Attorneys handle the legal side—court filings, compliance, and protection from creditors. Financial counselors handle the educational side—teaching clients how to budget, track expenses, and avoid future debt traps. Together, they form a team that supports both the legal and behavioral aspects of money management.

For example, a financial advisor can help a client establish an emergency fund post-discharge, while the attorney ensures that any lingering creditor activity stays within the bounds of the law. This collaboration ensures the client isn’t just debt-free for now but financially strong for years to come. Bankruptcy can be a chance to rebuild not only finances but also habits. When guided by professionals who care, clients learn how to turn financial discipline into financial independence.

Educating Clients and Encouraging Financial Confidence

One of the most underrated aspects of a bankruptcy attorney’s job is education. Many people walk into a consultation with misconceptions—believing bankruptcy ruins credit forever or that they’ll lose everything they own. Attorneys patiently debunk these myths and replace fear with understanding.

They explain how bankruptcy laws exist to protect honest debtors, not punish them. They clarify that certain assets, such as retirement accounts and primary residences (up to a value limit), are often exempt. They also highlight the emotional relief that comes from ending constant calls, letters, and threats from creditors..

Rebuilding Trust and Looking Toward a Fresh Start

Perhaps the most rewarding part of the process is watching clients rebuild. Bankruptcy can feel like rock bottom, but it’s also a foundation for renewal. Attorneys often witness transformations—clients who once felt hopeless eventually regaining stability and pride. Recovery doesn’t happen overnight. It takes consistent effort, accountability, and patience. But with the right mindset and guidance from bankruptcy attorneys, clients can move from crisis to control. Many even go on to start new businesses, purchase homes, and achieve milestones they once thought were out of reach.

At its heart, bankruptcy is about second chances. It’s about acknowledging that financial challenges can happen to anyone and that the law provides a structured way to recover. Through every step—assessing finances, filing paperwork, defending in court, and guiding recovery— bankruptcy attorneys serve as both advocates and allies.

Their blend of legal knowledge and human compassion helps clients face the future with confidence instead of fear. They turn overwhelming debt into an organized process, and confusion into clarity. If you or someone you know is struggling with debt and needs professional, compassionate guidance, reach out to Helbing Law Office, LLC today—where understanding meets experience to help you navigate debt relief with confidence.

Understanding Bankruptcy: What You Need to Know Before Filing

Mon, 18 Aug 2025 19:34:00 GMT

Bankruptcy is a legal process that provides relief to individuals or businesses that can no longer repay their debts. While often viewed as a last resort, it can be a valuable tool for those who are overwhelmed by financial burdens. Filing for bankruptcy can halt collection efforts, protect assets, and offer a structured path to debt resolution. However, it's crucial to understand what it entails before making any decisions. The process is governed by federal laws designed to ensure fairness for both debtors and creditors. Bankruptcy can help stop wage garnishments, foreclosure, and repossession temporarily or permanently. It also allows debtors to reorganize their financial obligations or eliminate certain debts altogether. Understanding the pros and cons will help you choose the best course of action for your unique situation.

There are different types of bankruptcy filings, the most common being Chapter 7 and Chapter 13 for individuals. According to Helbing Law, Chapter 7 involves liquidating non-exempt assets to repay creditors, often resulting in the discharge of most unsecured debts. Chapter 13, on the other hand, allows debtors to create a repayment plan over three to five years, typically enabling them to keep their property. Each type has eligibility requirements and consequences, so understanding them is key to choosing the right option.

Determining Eligibility for Bankruptcy

Not everyone qualifies for every type of bankruptcy. For instance, Chapter 7 requires passing a "means test," which compares your income to the median income for your state. If your income is too high, you may be required to file under Chapter 13 instead. Additionally, previous filings and dismissed cases can affect your eligibility and timeline for filing again.

Financial documentation, including tax returns, pay stubs, and a complete list of debts and assets, must be submitted with your petition. This information helps the court and trustee determine whether you qualify and which assets, if any, are subject to liquidation. A mistake or omission in this step can lead to delays, denials, or even allegations of fraud, so accuracy is essential.

Understanding Bankruptcy Exemptions and Assets

One of the most common concerns when considering bankruptcy is what property you may lose. Fortunately, both federal and state laws allow for exemptions that protect certain assets from liquidation. These can include your home, vehicle, retirement accounts, and personal belongings, depending on their value and your jurisdiction.

Understanding how exemptions work is crucial. In Chapter 7, exempt assets are generally protected from being sold, while non-exempt assets may be liquidated to pay creditors. In Chapter 13, you're usually allowed to keep all your property, but your repayment plan must reflect the value of non-exempt assets. Knowing what you can keep helps you make informed decisions about whether filing is right for you.

Evaluating Bankruptcy’s Impact on Credit and Future

Filing for bankruptcy does impact your credit score, typically causing a significant drop in the short term. A Chapter 7 filing remains on your credit report for up to 10 years, while Chapter 13 stays for seven. However, many people find that their credit begins to recover within a few years, especially if they adopt responsible financial habits. According to Debt.org, bankruptcy filings in the U.S. have been on the rise recently, with over 517,000 cases filed in 2024.

It's also worth noting that bankruptcy can actually be a stepping stone to financial rehabilitation. By eliminating or reorganizing debt, you may gain the breathing room needed to rebuild your credit. Over time, with on-time payments, responsible borrowing, and careful budgeting, many individuals are able to regain financial stability and qualify for loans, credit cards, or even mortgages.

Considering Bankruptcy Alternatives

Before filing, it's wise to consider alternatives to bankruptcy. Debt consolidation, credit counseling, and negotiation with creditors can sometimes offer relief without the legal and financial consequences of a formal filing. These options often involve working with a nonprofit or financial professional to create a manageable repayment strategy.

That said, alternatives aren't always feasible or effective for everyone. If your debts exceed your ability to pay even with reduced interest rates or extended timelines, bankruptcy may still be the most practical solution. Evaluating your full financial picture-including your income, debt load, and future obligations, is key to deciding whether to proceed with or avoid filing.

Following the Bankruptcy Filing Process

Filing for bankruptcy involves several key steps, starting with credit counseling, which is mandatory before submitting your petition. After gathering your financial documents, you or your attorney will file the bankruptcy forms with the court. This includes detailed information about your debts, assets, income, and expenses.

Once filed, an automatic stay goes into effect, halting most collection activities, including lawsuits, wage garnishments, and foreclosure. You'll then attend a meeting of creditors, where a trustee and any interested creditors can ask questions about your finances. As long as everything is in order and there are no objections, your debts will either be discharged (in Chapter 7) or reorganized into a court-approved plan (in Chapter 13).

Working with a Bankruptcy Attorney

Navigating bankruptcy law is complex, and mistakes can be costly. That's why many people choose to work with a bankruptcy attorney who can help ensure that forms are filed correctly, exemptions are applied properly, and deadlines are met. An attorney can also represent you in court, handle creditor communications, and provide strategic advice tailored to your unique situation.

Legal counsel is especially helpful if your case involves complications such as non-dischargeable debts, potential asset liquidation, or allegations of fraud. While hiring an attorney involves some upfront cost, it often pays off in the form of better outcomes and fewer surprises throughout the process. Their expertise can also help determine whether bankruptcy is truly your best option.

Clarifying Common Bankruptcy Misconceptions

Many people avoid bankruptcy due to misconceptions. One common myth is that you'll lose everything you own, which is rarely true thanks to exemptions. Another is that bankruptcy permanently ruins your credit, but as discussed earlier, credit can be rebuilt with time and effort. Some even believe that only financially irresponsible people file, yet many bankruptcies are triggered by events like job loss, illness, or divorce.

Understanding the truth behind these myths can make the decision to file less daunting. Bankruptcy is not a moral failure; it's a legal and financial tool designed to offer a fresh start. By educating yourself on the process and implications, you can make choices based on facts rather than fear or misinformation.

Filing for bankruptcy is a major decision, but it can offer much-needed relief and a chance to rebuild. If you're struggling with debt and unsure of your options, speaking with an experienced attorney can clarify your next steps. According to Helbing Law Office, LLC, many individuals find that a well-handled bankruptcy leads to renewed financial confidence and long-term stability.

Understanding your rights, obligations, and available solutions empowers you to take control of your financial future. Whether you ultimately decide to file or explore alternatives, don’t navigate this journey alone—professional guidance can make all the difference. Experienced attorneys can help you avoid costly mistakes and ensure that your case is handled efficiently. They can also negotiate with creditors on your behalf and protect your interests throughout the process. Having expert support provides peace of mind during a stressful time. Taking the first step to seek help is often the key to a successful financial fresh start.

Student loan discharge: New DOJ guidance showing promising results so far

Fri, 27 Jun 2025 21:08:37 GMT

Student loan forgiveness has been in the news for the past few years now. Opinions vary as to whether wholesale forgiveness is appropriate or not. All this talk of student loans has not been lost on the U.S. Justice Department. In November 2022, the DOJ implemented new guidance on how it will handle student loan discharges in bankruptcy.

Prior to this new guidance, borrowers were required to meet the so-called "Brunner Test." Under this test, debtors needed to show that they couldn't maintain a minimal standard of living if required to repay their student loans; their circumstances were not likely to change while in the repayment period; and they made a good faith effort to repay their student loans. This standard made it virtually impossible to have student loans discharged in bankruptcy. Very few debtors (and their attorneys) even attempted to receive a student loan discharge.

This new guidance has changed everything. Under this guidance, upon the filing of the bankruptcy, debtors submit an "attestation form" with the U.S. Attorney in the district the bankruptcy was filed in. The U.S. Attorney will review the attestations on an individual basis to determine if a bankruptcy discharge is appropriate. Not only is this process fairer, but it also leads to more consistent results.

The DOJ recently published its findings after year one. During the first ten months of this guidance, 632 adversary proceedings were filed seeking student loan discharge. This is a significant increase compared to prior years. 97% of those filers are using this new streamlined process. Most of those debtors are being granted some form of relief. In 99% of the cases to date, where the bankruptcy court has issued an order or judgment, the DOJ recommended either a full or partial discharge. These findings speak for themselves. Struggling debtors are receiving help in the form of a full or partial discharge of their student loans.

A few things to keep in mind if you are considering taking advantage of this new guidance. First, remember this guidance ONLY applies to federal student loans. Next, how old are you? How long have you been repaying your student loans? Are you disabled? Do you have some medical condition that impacts your income potential? Did you complete your degree? These are the considerations demonstrating a future inability to repay your student loans. Additionally, what efforts have you made to repay your student loans? Did you apply for a forbearance or deferment? Have you taken advantage of the "income based" repayment options? These questions are considerations regarding your prior efforts to repay your student loans.

This new guidance makes it easier to have your student loans discharged in bankruptcy, but it does not make it easy. If you have federal student loans, it should be considered in the broader context of filing bankruptcy. So, when meeting with a bankruptcy attorney, you should have a breakdown of all your federal student loans. You can get a printout from the National Student Load Data System ( www.nlsds.ed.gov ). Then be prepared to answer the questions listed previously. If you would like to discuss the possibility of having your federal student loans discharged, please feel free to contact me.

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SBA Loans: Understand What You Are Signing

Fri, 27 Jun 2025 21:08:37 GMT

Small business is the heartbeat of the American economy. Estimates suggest that there are over 33.2 million small businesses in the United States. Combined these businesses account for nearly 99.9% of all American businesses. Most, if not all, of these businesses begin the same way: an idea, a vision, and the need for capital. While the first two are individual in nature, many times the last element requires outside help. Few have the capital necessary to make their vision come to life, so many seek outside financing. This is where the Small Business Association (SBA) enters the picture.

Lenders are often hesitant to grant loans to small businesses due to their risky nature. The SBA guarantees these loans, so that lenders are willing to grant loans to these start-up and small businesses. These guarantees reduce the risk that lenders face in the event of a future default. Essentially, if the business fails, and the loan defaults, the SBA reimburses the lender, so it isn't left holding the bag. However, there is usually another element of these loans that is often overlooked and misunderstood.

Lenders, and the SBA, require a personal guarantee, especially when there is no collateral to pledge as security from the loan. A personal guarantee provides both the lender, and the SBA, another party to seek repayment from in the event of a default. Essentially, if the small business can't pay back the loan and defaults, the party granting the personal guarantee becomes wholly liable for the remaining balance on the loan. Even though the lender was reimbursed by the SBA for the default, the SBA is now the party holding the loss. Many times, the lender, on behalf of the SBA, will sue the guarantor of the loan to be compensated and made whole.

Clearly, with the business failure, there is no money to pay back this loan. After all, had the business been successful, the loan would have been paid. Often, I meet with clients wanting to file a business bankruptcy to eliminate the debts of the failed business. The first question I always ask is "did you sign a personal guarantee?" More often than I would like to admit, my clients have no idea. Unfortunately, my clients leave my office looking to file both a business bankruptcy AND a personal bankruptcy to eliminate the debt of the failed business.

The moral of this story, ask questions when starting a business. Understand the documents you are signing. Understand the risk you are taking with this business. But, if you find yourself in this situation, you have options. Please reach out to a bankruptcy attorney to discuss those options.

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SAVE Income Based Student Loan Repayment Plan: An absolute game changer!

Fri, 27 Jun 2025 21:08:37 GMT

The U.S. Department of Education has offered various income-based repayment plans for federal student loans borrowers for quite some time now. The goal of each of these plans is to calculate a monthly payment based on your income and make those payments for 20 years (10 if you are a public employee) and then receive student loan forgiveness.

A new plan was introduced recently that is an absolute game changer! The SAVE plan is designed to dramatically reduce monthly payments on your federal student loans for those qualifying for the program. The plan will not take full effect until July 2024; however, three key critical benefits have been implemented this summer before the student loan payment pause ends in August. Here are those benefits:

The amount of income protected will increase from 150% to 225% of the federal poverty guidelines;
Interest will be subsidized by the U.S. Department of Education on any monthly interest not covered by the monthly payment; and
Married borrowers who file their taxes separately will no longer be required to include their spouse's income in their payment calculation.

Two other key benefits will take place in July, 2024:

Payments on undergraduate loans will drop from 10% of incomes about the 225% of the federal poverty guidelines to 5%; and
Borrowers with less than $12,000 in loans will receive forgiveness in 10 years, with an additional 12 payments for each $1,000 borrowed above that level, up to a maximum of 20 -25 years.

To put this in perspective, let us use the following example:

The borrower is married with two kids. His wife does not have any student loans. While the household income is $150,000 per year, his income is $100,000.

The federal poverty guidelines for a household of four are $30,000. $30,000 x 225% is $67,500. The first $67,500 of his income is protected. The income used to calculate his monthly payment is $100,000 – $67,500 or $32,500. Now his payment is calculated from 5% of the unprotected income. $32,500 x 5% = $1,625. So, $1,625 divided by 12 will be a monthly payment of $135.42. The amount of savings under this program is nothing short of amazing.

If you would like to discuss how you would benefit from this program, please feel free to contact The Helbing Law Office.

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Wisconsin’s Alternative to Debt Consolidation

Fri, 27 Jun 2025 21:08:37 GMT

Debt problems can be overwhelming. Looking at those monthly minimum payments often feels like trying to fit a square peg in a round hole. Once the realization that help is needed, many people look to debt consolidation as the answer. But remember, as your mother would often tell you, "there's no such thing as a free lunch."

At face value, it seems like a great option. One manageable monthly payment to a debt consolidation company and three years later, voila! Debt free. If it were only so easy. Here are some things to consider when evaluating your options. First, is there a huge initial fee? What is the fee going towards? A reasonable "set up" is appropriate but beware of the large fee that is non-refundable. Next, are you being told not to speak with your creditors? This often results in you being served with a lawsuit down the road. Also, how is the monthly payment being applied? Is the company you hired making payments on your debt or simply "pooling" the money to make an offer down the road? Remember, if payments aren't being made, it will be reflected in your credit report. Furthermore, creditors aren't obligated to accept any settlement offer down the road. Finally, and this is important , debt settlement is a taxable event. If you settle a debt for 5o cents on a dollar, the fifty cents you don't have to pay back is imputed income to you. Expect to receive a 1099-C from your creditors at the end of the year and the IRS will be expecting you to pay taxes on those savings.

A better option exists for Wisconsin residents. A little-known law was enacted in 1937 to help Wisconsin residents struggling with high interest loans. A section 128.21 is an alternative to both bankruptcy and debt consolidation. It is a three-year repayment plan that puts the consumer in charge. Essentially, the consumer decides which debt to put in the repayment plan. Interest stops accruing on debt in the repayment plan. Also, creditors are prevented from all collection efforts (i.e., wage garnishment) for debts included in the repayment plan. Finally, since you are paying 100% of the principal back, it isn't a taxable event. No taxes will be paid on the interest saved.

Obviously, this is not an option for those with significant debt. But, for those with under $10,000 worth of debt, this is a great option. If you are interested in learning more, or simply to discuss all your options to debt relief, please feel free to contact me.

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Is a debt-free life achievable?

Fri, 27 Jun 2025 21:08:37 GMT

A recent survey found that the average American has over $54,000 worth of debt. What type of debt are these people carrying? According to the survey 57% is credit card debt; 30% mortgages; 30% automobile loans; and 28% medical debt. The results of this survey are staggering, but not surprising. Total household debt increased by $394 billion (that's with a "b") in the fourth quarter of 2022. Confidence that these numbers will decrease is extremely low when considering the rising cost of living; rising interest rates; and all too often unexpected expenses associated with daily life.

Debt has the uncanny ability of derailing our short-term and long-term goals. So, what would you do if you were debt free? Popular answers include: living a "stress free" life; pursuing a different career; building that dream home; or finally take that dream vacation.

Is a debt-free life achievable? First, analyze your situation. If you prioritized paying off your debt, would your standard of living change drastically or would you still be able to maintain a basic level of living? Also, how long would it take to pay off your debt? Will it take two years or ten? Is it sustainable under the current economic conditions?

If, after careful analysis, paying off your debt is not achievable or realistic, then you may want to consider bankruptcy. While nobody wants to consider this option, bankruptcy exists for those who have no feasible way of climbing out of their situation. Justification for not filing bankruptcy is easy: decline in credit score; loss of property; or just the stigma associated with this option. However, most of those reasons are either short-sighted or simply non-existent. Bankruptcy is a viable option to eliminating the unrelenting struggle with debt. Even if you are having a difficult time accepting this as a viable option, contact a bankruptcy attorney to discuss your situation. You may be pleasantly surprised with what you find out.

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Company to reopen plant making cosmetics

Fri, 27 Jun 2025 21:08:37 GMT

Companies that look to restructure following major setbacks or debt problems often turn to bankruptcy filings and proceedings to help with debt relief or to provide the time needed to reinvent the organization. This restructuring can affect things as critical as a company’s main product and business plan, resulting in a different operation than before the bankruptcy.

A company in Hartland, Wisconsin, that was closed down by the U.S. Food and Drug Administration due to a major recall of the alcoholic wipes that it produced is now looking to reopen as a cosmetics manufacturer. The company’s wipes were recalled after 11 people died from using them.

The Triad Group, formerly a manufacturer of medicines and alcohol-based wipes, was advised by the government that it could not continue operations at the location until a series of stringent conditions were met. The change to cosmetics will allow the group to proceed with reopening without the need for FDA intervention.

The company must still present its case in U.S. Bankruptcy Court overseeing its protection, and this filing is expected to take place in late 2012. It announced the move in court recently.

Bankruptcy protections allow a company to discharge or reduce debts so that it may remain in operation or close down and restructure without liquidating all of its assets. Maintaining assets such as a plant or manufacturing equipment can allow a company to recover from unforeseen circumstances and prosper in the long term.

Courts must approve all major decisions made regarding a company operating or reorganizing under bankruptcy protections, and business owners should strive to learn all they can about bankruptcy law.

Source : WHBL, “ Shuttered Triad Group plans to re-open as cosmetics maker ,” Sept. 14, 2012

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With home foreclosures rising, know your options June 13, 2023 Tim Helbing

Fri, 27 Jun 2025 21:08:37 GMT

With the current cost of living continuing to rise, so is the number of foreclosures nationwide. While the cost of gasoline, eggs and milk have slowly decreased, we all feel the pinch of other consumer goods remaining high, putting many at risk of falling behind on mortgage payments. Experts suggest this increase is a "normalization" process from loan forbearances and government assistance during the pandemic coming to an end. But to those served with a foreclosure notice, this feels anything but "normal."

What assistance is available if loan forbearance and government assistance is no longer available? Individual lenders may still offer some assistance; however, at this point, such assistance may be limited in nature.

A final option to consider is bankruptcy. First, all attempts to collect on a debt are prohibited during a bankruptcy. This means the foreclosure will stop upon the filing of the bankruptcy. Additionally, a repayment plan will be created, which will allow up to five years to pay the amount that you're behind on your mortgage. Although you will still be required to make your regularly scheduled mortgage payments going forward, the extended time you are allowed to pay the amount you are behind will provide much needed breathing room.

If remaining in your home is the most important consideration, you owe it to yourself to explore every option available to you.

Designer bounces from bankruptcy to the runway

Fri, 27 Jun 2025 21:08:37 GMT

Filing for bankruptcy is a difficult undertaking for many people. In this economy, however, many families are looking for any kind of debt relief. Although the bankruptcy process may be upsetting, there is hope after a bankruptcy is discharged. Designer Betsey Johnson discovered this after celebrating her first fashion show after bankruptcy during Fashion Week.

Johnson’s empire included retail stores, which were liquidated to pay off her creditors. The designer worked through her loss and cleaned up her finances. She also continued to work and created several new designs for her clothing label. After the bankruptcy was discharged, Johnson’s first show was a step toward restarting her business without debt.

According to reports, before the bankruptcy, the designer employed more than 350 people at 63 stores across the country. But with more than $4.1 million in debt and little cash, Johnson needed help. This included closing her stores and selling the Betsy Johnson brand.

Johnson did, however, manage to keep the design arm of the business, which allowed her to make a comeback at Fashion Week. The new designs are owned by the Steve Madden clothing company, which bought Johnson’s brand name; however, the clothing still carries the Betsey Johnson name.

Every person has the right to seek debt relief through bankruptcy; however, it should not be considered the end of the financial road. People like Johnson discover that bankruptcy is an ideal time to restructure, reinvent or simply restart the business or family financials. The goal is to shed the old credit card, car loan or medical debt and never return to such a financial position again.

Source: Wall Street Journal, “ Betsey’s back from bankruptcy ,” Jacqueline Palank, Sept. 13, 2012

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Don’t let these bankruptcy myths affect your decision

Fri, 27 Jun 2025 21:08:37 GMT

It’s never easy to find yourself thinking about bankruptcy, as this means your finances are in bad shape. However, if it’s the best way to regain financial control, it’s an idea you absolutely need to consider.

There are many bankruptcy myths that can affect the decisions you make, so you need to beware of these at every turn of the road.

You will lose everything in bankruptcy. Many people believe that bankruptcy can give them a fresh start, but not until they lose everything. You may lose some assets as a result of your filing, but some property is exempt.
Bankruptcy will relieve you of all your debts. While you can wipe clear many types of debt with bankruptcy, this doesn’t hold true across the board. For example, bankruptcy doesn’t have any impact on student loan debt, alimony payments or child support.
Filing for bankruptcy means you don’t know how to manage your finances. Although you may have made some poor decisions, remember this: Bankruptcy is often the result of something that is out of your control. For example, losing your job or becoming ill with a serious disease can both result in financial problems.
Filing for bankruptcy will doom you in the future. Yes, a bankruptcy filing will make it more difficult to secure a loan in the future. Subsequently, buying a car or home may be a challenge. While true, you can get your finances back on track. For example, using a secured credit card allows you to slowly rebuild your credit.

If you believe these myths to be true, you may find yourself shying away from bankruptcy when it’s actually just what you need.

If there’s reason to believe filing for bankruptcy can improve your financial situation, focus on the pros and cons of both Chapter 7 and Chapter 13. The information you collect allows you to better understand your situation and what will happen if you proceed.

It’s a big decision that will impact your life in many ways, but as long as it’s rooted in facts, not myths, you should be able to move forward with confidence. Soon enough, you’ll realize that you’re on track to improving your life in many ways.

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Debt collector got it wrong, court rules

Fri, 27 Jun 2025 21:08:37 GMT

There are few things more tenacious that an unpaid student loan. The U.S. Department of Education pulls out all the stops to collect from borrowers who default on loans that it guarantees. People who file for bankruptcy often discover those loans are still hanging around when a collection agency comes knocking on the door. Discharging a student loan debt through bankruptcy is very difficult but not impossible. One collection agency told debtors it couldn’t be done. The Second U.S. Circuit Court of Appeals says that’s not true, and will allow a lawsuit against the collection agency to stand. Collectco, Inc., the agency involved, told debtors in writing that student loans cannot be resolved in bankruptcy and the balances must be paid off. The case began when a woman in Buffalo, New York tried to discharge her $2,460 student loan debt in a bankruptcy proceeding. She did not claim undue hardship at the time. Seven years later, she received a letter from Collectco telling her the student loan was still on the books and must be paid. The woman sued on behalf of herself and 181 others who got the same letter. The Appellate Court ruled that the letter was misleading, and allowed the lawsuit against Collectco to proceed.

Actually, the law does allow forgiveness of the debt but the process is not easy. The borrower must prove that paying the amount owed would impose “an undue hardship on the debtor,” meaning the inability to meet a minimum standard of living. One component of that test is convincing a judge that the petitioner’s financial circumstances indicate a “certainty of hopelessness” for a long time to come. Fewer than 1,000 borrowers try to run this legal gauntlet every year. Before 1975, it was easy to discharge student loan debt as part of an ordinary bankruptcy. Then Congress got word about newly-graduated doctors and other professionals filing for bankruptcy immediately after finishing school, thus ridding themselves of huge debts. Lawmakers, annoyed at what they saw and eager to protect taxpayer dollars, changed the law in 1976. The law was tuned up with tougher provisions in 1990 and 1998, and in 2005 protection for private lenders was added. One thing lawmakers did not do is define “undue” financial hardship. Judges across the country have been trying to figure it out since. So despite blustery warnings from lenders that student loans are forever, a skilled bankruptcy attorney can help borrowers get relief from those debts and start rebuilding their financial lives. Source: The New York Times, “ Debt collector mislead borrowers, court says ,” Andrew Martin, Aug. 31, 2012

Cross collateralization can leave people with hard choices in bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

Credit unions are a popular alternative to traditional banks for many people. Members say they enjoy an atmosphere that is more focused on the customer and the better rates they can sometimes get on loans and savings accounts. However, credit unions often use cross collateralization with their loans, which can be detrimental to the borrower, especially when the borrower is seeking discharge of his or her debts in Chapter 7 bankruptcy .

Chapter 7 bankruptcy

Chapter 7 bankruptcy is a valuable tool for people overwhelmed by debt because it gives them the opportunity to obtain a fresh financial start. Upon filing for bankruptcy, all debt-collection actions must stop. An "automatic stay" is imposed that puts an end to harassing phone calls from debt collectors and halts repossession or wage garnishment proceedings. In addition, all unsecured debt such as medical debt and credit card debt usually can be discharged in Chapter 7 bankruptcy, meaning the borrower is no longer legally responsible to pay the debt.

When a borrower has a loanliner agreement with a credit union that has cross collateralized debt, however, the borrower may be forced to make a tough decision regarding debt discharge.

Cross collateralization

Credit unions often use cross collateralization to secure their loans. This means that something of value that is already being used as collateral for one loan is also used as collateral for a second loan.

For example, a credit union may give a borrower a car loan and use the car as collateral for the loan. If the borrower stops making payments on the car loan, the credit union can repossess the car and sell it, using the money for repayment. With cross collateralization, when the borrower gets a second line of credit with the credit union, such as opening a credit card, the credit union will use the car as collateral for the credit card debt as well. Then, the credit union can repossess the car if the borrower does not pay his or her credit card debt, even if the car loan is fully paid off.

This cross collateralization can be particularly problematic in Chapter 7 bankruptcy. The bankruptcy filer likely wishes to discharge his or her credit card debt in bankruptcy, but if that debt is secured by his or her car through cross collateralization, the filer must choose between reaffirming the debt (continuing to be obligated to pay it) and keeping the car or discharging the credit card debt but losing the car as collateral. This can be a difficult decision, but if the value of the car is much less than the amount of outstanding credit card debt, the filer often elects to give up the car.

Filing for bankruptcy is a way to obtain relief from unmanageable debt, but the procedures can be complex. If you are struggling to make ends meet, contact a knowledgeable bankruptcy attorney to learn about the debt-relief options that may be available to help you.

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What happens if a creditor contacts me during or after my bankruptcy?

Fri, 27 Jun 2025 21:08:37 GMT

If you are in debt, you may already be familiar with the protections you have against creditor harassment under Wisconsin and federal law (i.e. the Fair Debt Collections Practices Act). These laws protect you against debt collectors using misleading or abusive tactics when attempting to collect a debt against you. However, you may not know what happens if creditors attempt to contact you about a debt during or after bankruptcy. Fortunately, you have legal protections if this occurs.

Protections during bankruptcy

Once you file bankruptcy, the automatic stay becomes effective. While the stay is in place, creditors are legally prohibited from doing anything to collect a debt against you. This includes contacting you, suing you or taking back collateral that secures a debt against you, such as your house in a mortgage or your car in a car loan.

Although most creditors respect the stay, from time to time, there are a few that do not. If a creditor violates the stay by attempting to repossess collateral , you are entitled to ask the bankruptcy court to order the return of it.

In addition, for all violations of the stay, you are entitled to seek damages for violations from the errant creditor. In cases where the creditor knew or should have known that the stay was in effect, you may collect compensation for any actual losses you suffered because of the violation. Additionally, you may recover attorney's fees to compensate you for asserting your rights. In extreme cases, you may also recover compensation for emotional distress and punitive damages.

Regardless of whether damages are awarded to you, the court can punish creditors who violate the stay. Since the stay is a court order, the court has the discretion to sanction any creditor that violates it for contempt of court, which can entail fines and assessments for court costs.

Protections after bankruptcy

Once you have completed bankruptcy, you have received a discharge of many of the debts you owed before bankruptcy. Legally, this means you never have to repay them. However, some creditors may attempt to contact you about your discharged debts and attempt to persuade you to repay them. However, this is illegal and is punishable by law.

If a creditor violates the discharge order, you have many of the same rights as you do for stay violations. As a result, you may recover any actual losses you incurred because of the violation plus attorneys' fees. Additionally, the creditor may face contempt of court sanctions and be forced to pay fines and court costs.

An attorney can protect your rights

Although most creditors obey the law, there are a few bad apples out there. Fortunately, for stay and discharge violations, it does not typically cost you anything to fight back against creditors who do not respect the law, since your attorneys' fees may be recovered in the process. If you are experiencing creditor harassment at any time, it is wise to speak with an experienced bankruptcy attorney to learn about your options and receive recommendations regarding the best way to proceed.

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Wage garnishments a threat for those struggling financially in Wisconsin

Fri, 27 Jun 2025 21:08:37 GMT

Many people are struggling to make ends meet in Wisconsin as the economy slowly begins to recover from the Great Recession that started in 2008. Even those who are lucky enough to still have jobs are having difficulty paying their bills, and many are falling further and further behind. Creditors have become more aggressive in their collection tactics, and will not hesitate to get judgments against people who have unpaid bills in order to be able to garnish people's wages. Wisconsin residents should understand the garnishment process and some defenses that they have against wage garnishment.

Garnishment procedure

Wisconsin law defines earnings garnishment as an action where a creditor collects for a civil judgment for money damages, including statutory interests and costs, from the wages of the person against whom the creditor obtained the judgment. This means that a creditor first needs to get an order from the court stating that a person owes the money before the creditor may begin taking money out of a person's paycheck.

Once the creditor has obtained a judgment, the creditor can file a garnishment notice with the court for a fee. The creditor will then get papers to serve on the person who owes money and the employer instructing the employer to begin withholding wages starting the next pay period after receiving the notice. The papers that the creditor serves on the person who owes explain the defenses a person has to wage garnishment and an answer he or she can file if any of those defenses apply. If the creditor does not believe the defenses apply, the creditor may request a court hearing to determine whether the defenses are applicable.

If the person who owes money does not file an answer, the garnishment commences and can last for 13 weeks after the notice. The garnishment period can extend longer than 13 weeks if both parties agree in writing.

Defenses to garnishment

Wisconsin law puts limits on how much of a person's wages a creditor may garnish. In general, a creditor may not take more than 20 percent of a person's net income, and only one creditor may garnish a person's wages at a time. If a person also has money withheld for child support in addition to a creditor's garnishment, the total withholding may equal 25 percent of his or her net income.

If a person's total household income is less than the federal poverty level, then all of his or her wages are protected from garnishment. If garnishment would put a person's household income below the federal poverty level, then only the amount above the federal poverty level is subject to garnishment. If a person has been receiving or approved to receive public assistance within the six months prior to the garnishment action, he or she is automatically protected from garnishment.

Bankruptcy may be a solution

Even if a person stops creditors from garnishing wages, the debts do not disappear. Those who are battling wage garnishment and creditor harassment may want to consider bankruptcy as a way to reorganize their finances. People can discharge many of their debts in bankruptcy and free up their wages to keep from falling further behind in their future bills. If you are facing wage garnishment and do not know how to get out from underneath your debts, speak with an experienced Wisconsin debt relief attorney who can let you know your options.

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5 common bankruptcy myths that you shouldn’t believe

Fri, 27 Jun 2025 21:08:37 GMT

Bankruptcy is a powerful legal tool, but it is one that many people do not really understand. There is as much misinformation floating around about bankruptcy as there is accurate information. Arguably, the average person probably knows more myth than legal truths about bankruptcy. The five myths listed below are among those that could have the biggest damage to individuals.

1. Only poor people file for bankruptcy

One of the most common misconceptions about bankruptcy is that it only helps those with low or no income. Individuals with significant personal income could also have high levels of debt. In fact, it often costs more to work a high-status and high-paying job because everything from your vehicle to your clothing faces more scrutiny.

2. Bankruptcy is a sign of financial irresponsibility

If people acknowledge that those other than low-paid working-class people file for bankruptcy, they probably assume that those higher-earning filers made irresponsible or outright selfish decisions. In reality, even skilled professionals may only be a single car crash or severe illness away from insurmountable medical debt and far more bills than income.

3.Bankruptcy means you have to give up everything

Bankruptcy is synonymous with the requirement to liquidate your property for many people. While it is true that Chapter 7 filings require the sale of certain assets, property ranging from some of your home equity to value in a vehicle is exempt from creditor claims in bankruptcy. Additionally, there are other forms of bankruptcy, like Chapter 13, that don’t require that you get rid of any property at all.

4.Bankruptcy gets rid of all of your debt

Some people assume that bankruptcy simply erases all of their debt. They might think they could keep their home without paying off their mortgage or erase six figures worth of medical school debt. In reality, it is largely only unsecured debts that are eligible for discharge. Student loans, in particular, can be hard to discharge. Other debts are not ever eligible for discharge, including federal tax debt.

5.Bankruptcy will forever limit your financial opportunities

Bankruptcy absolutely limits what credit opportunities you have right after filing. Still, most people find that they can get a credit card within a year and finance bigger purchases within a few years of bankruptcy.

Depending on the kind of bankruptcy you file, at the latest, your bankruptcy will be off of the public record a decade after your discharge. At that point, it will have no impact on your credit other than its contributions to your ability to rebuild your financial circumstances.

Learning more about the bankruptcy process can help you evaluate whether it could be the right way for you to take control of your life again.

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Credit card debt in America: You’re not alone in debt

Fri, 27 Jun 2025 21:08:37 GMT

Most Americans have one thing in common: They're dealing with thousands of dollars in credit card debt. The average amount of credit card debt for men is around $7,407. For women, that amount is $5,245.

The average amount of debt in the country is $5,315 per adult in 2021. In 2019, that amount was $6,194, which means that most individuals have reduced their debt by around 14% in that time.

While credit card debt has reduced throughout the country, there are several reasons for that (not all of them are good). A struggling economy and job losses may have contributed to the drop in debt, since people focused on reducing their debts instead of adding to them in that time.

Which states have the most credit card debt?

The states that have the highest average credit card debt include Maryland, New Jersey, Connecticut, Alaska and Virginia. Wisconsin is listed among the states with the lowest amount of credit card debt. In 2020, the average debt was $4,376, which is significantly below the national average.

Credit card debt is overwhelming, but there are ways to eliminate it

Credit card debt may be overwhelming, especially if your income suddenly changes or the debts grow beyond what you can afford. In those cases, there are steps that you can take to minimize those debts and to have them eliminated, too.

Bankruptcy is one option. There are two primary forms, Chapter 7 and Chapter 13, which may allow you to pay back what you owe through liquidating assets or repaying debt on a payment plan. Both of these will have an impact on your credit, which is something to consider.

Are there options other than bankruptcy for eliminating debt?

Other options for getting a handle on your debt may include reducing spending, increasing your income, selling items on your own to pay down debt , getting a consolidation loan or contacting your lenders to negotiate a settlement. Your attorney can talk to you about each one of these options to help you decide if one of them could help you get out of debt soon.

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Which bankruptcy should you choose? 3 tips to help you decide

Fri, 27 Jun 2025 21:08:37 GMT

Selecting the type of bankruptcy you should choose might seem difficult, but the truth is that there are some significant differences between the types of bankruptcy that should make it easier for you to choose.

The two main types of consumer bankruptcy include Chapter 13 and Chapter 7. Chapter 7 bankruptcy is best used in situations where a person has limited income or no way to pay what they owe. On the other hand, Chapter 13 bankruptcy , also known as a wage-earner's plan, is for those who can afford to pay some of their debts but who need to have it reduced or consolidated.

So, how can you choose which one is right for your situation?

1. Check your income

Start by looking at your income. If you have no income or have debts that are more than your total income, then a Chapter 7 bankruptcy may be right for you. On the other hand, if your income is significant but you have heavy debts that are making it hard to live comfortably, a Chapter 13 bankruptcy may be a better option.

2. Consider liquidation

The next thing to understand is that Chapter 7 bankruptcy is a kind of liquidation bankruptcy. Some of your assets may be sold to pay back what you owe. This is not true of Chapter 13 bankruptcy, which allows you to make payments over time. If you don't want to lose your assets, then Chapter 13 bankruptcy gives you a better opportunity. However, there are exemptions that protect people's assets in Chapter 7 as well.

3. See if you meet the income limits

Chapter 7 bankruptcy has income limits. When you're trying to decide if you should seek it, talk to your attorney about your current income and if you will qualify for Chapter 7 bankruptcy. If not, then Chapter 13 may be the right option for you.

These are three tips to help you find the right kind of bankruptcy for your financial situation. These are two options that your attorney can help you look into as you focus on resolving your debts.

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What creditors can’t do to you

Fri, 27 Jun 2025 21:08:37 GMT

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A creditor, a person who owns your debt, has a legitimate right to attempt to collect on that debt. But just because they have a right to get their money doesn't mean they have the right to treat people however they want.

Let's be very clear on something right up front: creditor harassment is prohibited by law , here in Wisconsin and across the US. Whether or not you've filed for bankruptcy, debt collectors cannot do whatever they want to get you to pay. The law specifically says that a debt collector may not:

Harass you over the phone

There is a common practice of using the phone to drive a debtor up-the-wall with frustration or annoyance.

Use aggressive language

Debt collectors often try to intimidate debtors by using threats of violence and explicit language. This sort of harassment can take the form of visits, phone calls, or letters.

Shame you

Another common threat from a debt collector is "exposure." They may call to say they will post your name on a website of delinquent debtors. If your creditor posts your information like this, it is a violation of your rights.

Lie to you

When you receive a call from a creditor, they must tell you who they are and why they are calling. They cannot tell you that you owe more than you owe. They cannot tell you they are an attorney if they are not. Most importantly, they cannot threaten you with an arrest.

But what can you do?

Of course, just because they aren't supposed to take those actions doesn't mean they don't. If a creditor harasses you, you can take steps by reporting them to the proper authorities at the federal and state levels. If your debts are significant, you may even consider filing for bankruptcy and receive an automatic stay on all your debts.

It's hard enough to fall into debt. No one needs to dread the ring of their phone.

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Bankruptcy serves as a solution so ignore judgment from others

Fri, 27 Jun 2025 21:08:37 GMT

The worries and stress sometimes overcome you. Extreme financial debt has placed you into a pit that you presume is difficult to climb out from. You want and need to be in a better financial place, but what can you do? Plenty. An initial step is filing for bankruptcy.

"Oh, my! I would never do that!" you declare. "It is too much of a burden! And what will the neighbors think!" Stop being an obstacle in your own life, think about the benefits of filing for personal bankruptcy and ignore the behind-the-back whispers from family, friends and acquaintances. Do not even bother to look over your shoulder due to the judgment of others. This is expected, so just disregard them.

There is no shame in pursuing financial recovery

This is your life and your decision signifying that you remain prepared to financially begin anew in having most of your debts wiped out. Remember, there is no shame and no stigma to bankruptcy , which steers you into a fresh beginning. Bankruptcy serves as a solution to get you back on track financially.

When confiding with others, you may discover that they, too, have experience with bankruptcy. You may be surprised. The Federal Reserve Bank of New York noted that roughly 14% of American households "about 17 million" owe more money than they actually own. While many such households could be helped by filing for bankruptcy, fewer than 1% annually do so. In 2019, the country reported 752,160 personal bankruptcy filings .

Focus on the future and a turnaro und

With bankruptcy, your eyes remain focused on the future. Look upon your financial recovery as an achievable and educational challenge. The turnaround has begun. Although it will take some time, you eventually can improve your credit score with a bit a discipline and belief in yourself.

You want to be in control again, and, in time, you will be in control. Your outlook and situation automatically improve when you take that first step in filing for bankruptcy. There is no shame in seeking a better financial life. Think about it. You are on the road to recovery.

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4 signs it’s time to consider bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

Far too many people consider bankruptcy a last resort. In their minds, they equate Chapter 7 and Chapter 13 bankruptcy with a failure of financial responsibility. In fact, the Bankruptcy Code was written in anticipation of hardworking Americans facing overwhelming debt due to circumstances beyond their control. From job loss and divorce to medical bills and home repairs, most people simply cannot survive a significant financial disaster.

Fortunately, bankruptcy exists to eliminate unsecured debt and help people make a fresh start. While you can continue to battle against mounting debt, you should recognize the signs that you need to consider your financial options.

You're missing debt payments: While being late for the occasional credit card payment might not necessarily spell doom, when individuals start to consistently miss mortgage payments, student loan payments, car payments or medical bills, it might be time to consider your options.
You're hearing more and more from debt collectors: Creditors are not shy about enlisting the aid of collection agencies when you get far enough behind on your payments. With phone calls, letters and emails, their collection efforts can be frustrating, annoying and threatening.
You've reached your credit limit on multiple cards: Having to juggle credit card debt can seem like a never-ending battle. However, if you find that more than one card is beyond use, then you might be facing trouble.
You are buried in debt from a personal disaster: A medical emergency, a big home repair or job loss can all spell financial peril. Many individuals do not have the savings or cash reserves to cover a dramatic change in their finances.

If you are noticing any of these situations occurring in your life, it might be wise to consider bankruptcy as an option.

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Some debts remain after personal bankruptcy, but you can manage

Fri, 27 Jun 2025 21:08:37 GMT

Filing for bankruptcy likely provides the springboard for your new financial beginning. Your debt and financial struggles proved to be a wake-up call, and you clearly understood that certain behaviors in your life had to change, namely your spending habits.

And now that you have taken the necessary step, you wonder just how much of your debt slate will be wiped clean? You must understand that not all debt will go away. Still, you remain responsible for certain debt that remains upon filing for personal bankruptcy.

Child support and most taxes remain

Non-dischargeable debt is the debt that remains after someone files for personal bankruptcy. Among the examples of non-dischargeable debt include:

Alimony: If you have been divorced and the agreement included the requirement of spousal support, you must continue to pay your former spouse. However, there are rare instances when payment modifications are possible.
Child support: There is no way of getting out of making these payments, and why would you want to do so? Your child and your former spouse depend on these payments as part of the divorce agreement. Continue to pay your fair share.
Many taxes: Once the bankruptcy proceeding concludes, the U.S. government immediately seeks to collect any outstanding taxes. However, if you are well behind on your taxes, the IRS may temporarily suspend your tax debt.
Student loans : Previously this was always the case. However, examples exist in which courts discharge student loan debt if it met "undue hardship" standards .

In filing for personal bankruptcy, you have taken a major step toward improving your financial standing. Discipline helps, but also remember that bankruptcy does not eliminate certain debts.

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News For You: We’re Now Serving Green Bay

Fri, 27 Jun 2025 21:08:37 GMT

We at Helbing Law Offices are pleased to announce the opening of our new office in Green Bay, Wisconsin. Our team is excited to begin serving clients in the Green Bay area, helping them recover from their financial issues and begin with a fresh start.

Why work with a local attorney?

Many of the bankruptcy attorneys in Wisconsin are located in cities that are inconvenient for Green Bay residents, hours away. At Helbing Law Offices we understand the importance of working with an attorney who is local and readily available. Why go farther than you need to and why work with a faraway attorney who doesn't understand what you've gone through?

How can we help?

Attorney Helbing lives in Green Bay and raised his family there. He understands the issues specific to this area and is well equipped to help its residents sort through their debt and financial issues.

No longer is bankruptcy a scarlet letter stamp of failure. Attorney Helbing knows that bankruptcy can be a fresh start for families that have fallen on unavoidable hard times. He understands how unexpected financial issues can take people by surprise and throw them into situations out of their control. He will help you through these tumultuous times and make sure you get started getting back on your feet .

Each bankruptcy case is unique, and no two people's experiences are alike, so the team at Helbing Law Offices is committed to providing personalized, tailored service and solutions to each of our clients individually. Bankruptcy can be a lifeline. Let us help you sort out your debt issues, locally, in Green Bay.

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The difference between Chapter 13 and Chapter 7 bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

Bankruptcy is a safety rope that can save many people from crippling financial debts. There are multiple forms of bankruptcy, and each of them offers different benefits and drawbacks. If you are considering bankruptcy, how can you be sure which option is right for you?

Despite how difficult it may seem to decide between bankruptcy options, hundreds of thousands of Americans decide every year . To help you decide, here is a summary of Chapter 7 and Chapter 13 bankruptcy:

Chapter 7

The goal of bankruptcy is to help an applicant take back control over their finances. Chapter 7 bankruptcy offers this control by discharging most of your debt. To receive a discharge of debt, a Chapter 7 applicant will need to sell any non-exempt assets. Once the applicant has sold their non-primary homes, heirlooms, and collectibles and applied those funds to their debt, the government will discharge the remaining debt.

Chapter 13

This option of bankruptcy does not require the debtor to sell their possessions. Instead, Chapter 13 bankruptcy restructures the monthly payments an applicant has into a single monthly payment into a new payment plan. This payment plan lasts between three and five years. Once the payment plan is done, the remaining debt is then discharged.

Which should you pick?

It may still be challenging to choose which bankruptcy option you want to pursue. Speak with a bankruptcy attorney to gain a better understanding of how each option can impact you. Do not be afraid to seek bankruptcy, as it may help you escape financial hardship.

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What happens to student loans in bankruptcy?

Fri, 27 Jun 2025 21:08:37 GMT

With student loan debt soaring to a record $1.6 trillion total, many Americans with college degrees are left with large debts that they struggle to pay back. When other financial troubles arrive, turning to bankruptcy may be the only option. Many people in this situation may wonder whether the burden of student loan debt could be lifted through a bankruptcy filing.

Recent laws have made it more difficult to discharge student loan debt.

Many people believe that discharging student loan debt in bankruptcy is impossible, and it is easy to see why this belief persists. Thanks to new laws over the past few decades, it is much more difficult for bankruptcy to offer you relief from these debts. That doesn't mean that relief is impossible, however.

Despite the difficulties of discharging student loan debt, you may be able to achieve relief if your struggle passes the Brunner Test. This test requires you to illustrate that:

You have tried to pay back your student loan debt
You cannot achieve an acceptable standard of living while making the required payments
This struggle is likely to continue until the loan repaid

Because interpretation plays a part in whether the court considers your debt " an undue hardship ," it can be important to work with an experienced bankruptcy attorney when presenting your case.

What will happen if your debt is an undue hardship?

If your case succeeds, the court may grant you relief from student loan debt in several different ways. These include:

Discharging your student loan debt
Discharging part of your student loan debt
Changing the terms of your loan to relieve the hardship

While challenging, it is possible to achieve meaningful relief from the burden of student loan debt through the bankruptcy process.

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Have you heard these 3 common bankruptcy myths?

Fri, 27 Jun 2025 21:08:37 GMT

It’s no question that filing for bankruptcy can be a stressful time in a person’s life. However, there are many misconceptions that may permeate your mind when it comes to bankruptcy which makes it seem scarier than it really is.

Myth #1: You’ll lose all your possessions, including your home

Many people fear bankruptcy because they’re afraid they’ll lose all their valuable possessions, including their houses. While it’s true that you may need to liquidate some of your assets to pay off your debts, it isn’t a guarantee that you have to give up everything, let alone your house.

It also depends on what type of bankruptcy you file for. Chapter 13 generally allows people to keep their homes as long as they follow through with the designated repayment plan. In Chapter 7, you can declare your home as exempt. That means that it will not be included in the assets marked for liquidation.

Myth #2: Bankruptcy will permanently affect your credit score

There’s no sugar-coating it — your credit score will take a hit after filing for bankruptcy. This can make it difficult to take out loans or apply for new credit cards. However, rebuilding your credit score is entirely possible after bankruptcy. And although it can take upwards of 10 years to get back to where you used to be, there are steps you can take immediately after filing for bankruptcy that will help you restore your credit.

Myth #3: Filing bankruptcy means you failed

It’s easy to feel disheartened and hopeless when you realize that bankruptcy may be the only option. But filing for bankruptcy does not mean you have failed in any way. In fact, there are several factors outside of your control that might require bankruptcy, including an increase in medical bills or a sudden job loss .

Start managing your debt tod ay

In reality, bankruptcy is an opportunity to embark on a fresh financial start. It isn’t a scheme or ploy to punish people with outstanding debts. By debunking these common bankruptcy myths, you can hopefully overcome any worries you have and decide if bankruptcy is right for you.

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Bankruptcy may eventually improve your credit score

Fri, 27 Jun 2025 21:08:37 GMT

There should be more to life than constantly struggling to pay monthly bills. Unfortunately, even if you manage to make payments on time, an emergency expense may leave you with a tremendous amount of debt. You probably do not have to bear the anxiety that comes with financial insecurity, though. On the contrary, filing for bankruptcy protection may help you to proactively manage your outstanding debts.

Virtually everyone knows that bankruptcy filings are bad for credit scores. Experian, a credit reporting service, notes that bankruptcies remain on credit reports for a decade. While your filing may cause your creditworthiness to take an initial hit, bankruptcy may eventually improve your credit score in a couple important ways.

Reclassifying delinquent accounts

Your creditors expect you to make payments on time. If you do not have the financial ability to do so, some accounts may appear on your credit report as delinquent. Put simply, delinquent accounts are kryptonite for your credit score. A bankruptcy filing, though, reclassifies delinquent accounts as discharged. If you have a low credit score, this reclassification may cause an immediate improvement .

Improving your debt-to-income ratio

When extending credit, creditors typically consider borrowers’ debt-to-income ratio. That is, to ensure that you have the financial ability to pay your balances, your creditors want you to have considerably more income than debt. If you are drowning in debt, your debt-to-income ratio may be too high. Or, you may owe more in monthly payments than you make. A bankruptcy filing may allow you to discharge many of your debts. This can improve your debt-to-income ratio considerably, eventually causing your credit score to rise.

If you have too much debt, your credit score may already be low. While a bankruptcy filing is apt to cause some problems with your credit rating, it may be the best way to manage your debt. Even better, taking advantage of bankruptcy protections may be the first step in rebuilding your creditworthiness.

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Is there any relief for student loans?

Fri, 27 Jun 2025 21:08:37 GMT

There is a prevailing myth that student loan debt is impossible to discharge or mitigate. While it is true that student loan debt is very difficult to deal with compared to other debts, it is not true that no relief is possible.

If you struggle with seemingly insurmountable student loan debt, there may be some answers. You should consider some of the following scenarios and see if they apply to you.

Discharging other obligations

Most people dealing with student loan debt are facing other debts as well. Even if bankruptcy does not reduce or eliminate student loan payments, relief from other debts may allow you to pay these bills.

Deferment or forbearance of payments

Deferment and forbearance may sound like similar ideas, but there is a critical difference. While both may allow you to stop making payments for some period of time, deferment may also keep the lender from charging interest for this period. This may add up to substantial savings. Forbearance may help you during a difficult time, but interest expense will be piling up.

For both deferment and forbearance, you must show that you are experiencing financial difficulty: unemployment, health problems or insufficient income. If your income is such that your student loan payments amount to more than 20% of your monthly income, you may qualify.

Discharge of student loans in bankruptcy

Truly discharging or canceling your student loans is difficult, but is possible in some cases. If you suffer from a disability (either permanent or temporary), or were a victim of some kind of fraud, you may have a case. You can also sometimes have your student loans cancelled if you join the military, perform services in some needy or underserved community, or work in certain sectors of health care or law enforcement.

It may be worthwhile to consider these options if you are facing economic hardship because of your student loans. Do not assume that there is no relief in your situation; review your options before you go into default on your student loans.

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Recovering financial stability after bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

If you are struggling with an overwhelming amount of debt, filing for bankruptcy may provide a chance for you to start fresh and regain control of your financial situation. Once you go through the legal process of filing for bankruptcy in Wisconsin, you may wonder how long it will take to become financially stable again.

According to Forbes, lending statistics from 2017 show that over 60% of people who filed for bankruptcy were able to develop a credit score of 640 or above within two years. Your financial circumstances and the details of your bankruptcy filing may affect your recovery process. However, good planning and sound financial decision-making often can help you recover from bankruptcy in just a few years.

1. Reestablishing your financial priorities

One of the most important parts of recovering from bankruptcy is recognizing how it happened. For example, irresponsible spending habits may have led to credit card debt. In this case, limiting your discretionary purchases could help in the future. If your bankruptcy came from other sources, such as medical bills or student loans, discharging the debt may give you the chance to start over.

2. Building up credit responsibly

Applying for a secured credit card following bankruptcy may be a step toward rebuilding your credit profile. This type of credit card typically requires a deposit to establish a credit limit. Using a card to make small purchases and paying the statement in full every month may improve your credit rating.

3. Monitoring your finances

Having the right information can help you avoid future financial problems. Budgeting and tracking purchases reduce the risk of getting into debt again. A credit monitoring service can offer insight into what affects your score.

Bankruptcy may offer you a new beginning, allowing you to regain your financial stability through responsible choices. Making a budget, tracking your credit score and avoiding unnecessary purchases are a few ways to make a quick financial recovery.

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Claims of fraud in bankruptcy cases

Fri, 27 Jun 2025 21:08:37 GMT

When you choose to file for bankruptcy, you have to list all of the debts that you have in your name. This means that you can’t pick and choose which ones are going to be part of the case. Because of this, you have to think about how this will impact your life by looking into what each creditor can do that will affect you. For example, there is a chance that a doctor’s office might decline to see you again if you can’t pay the bills and they are discharged in a bankruptcy.

One consideration when you file for bankruptcy is that you don’t want to be accused of fraud. It is assumed that if you make luxury purchases of more than $725 within 90 days of filing or take out a cash advance of more than $1,000 within 75 days of filing that you did so with the intent to defraud the creditor. If the court finds this is true, it deems the debt nondischargeable. In order to fight this, you have to show that you had no intention to file your case at the time the transaction occurred.

Typically, the process of determining if something was done fraudulently will start with a complaint of nondischargeability that is filed by one of your creditors. After looking at the facts, the court will determine whether you must pay the debt back or not.

Remember, this is only one aspect of bankruptcy that you have to think about. Others can also impact whether this is the right decision for you or not. You must consider all factors before you make your final decision.

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Repayment plans must be taken seriously in bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

A person who is overwhelmed by debt is likely going to try to find some relief. For some, the only reasonable option is to file for bankruptcy. Unfortunately, there are negative connotations associated with filing for bankruptcy because some people believe this gives you a free way out of all your debt. However, many people facing financial challenges still end up repaying a significant portion of their debts through a Chapter 13 bankruptcy and repayment plan instead.

If you’re considering a Chapter 13 bankruptcy, you might wonder exactly what a repayment plan is going to entail. There are several factors that have to be considered. Your income and necessary bills are at the top of the list and help determine your ability to repay some of your debt over time. Once you have this information, a payment schedule can be made toward your debts. The payments that you are required to make will go to the bankruptcy trustee for as long as you remain in bankruptcy, which is generally three to five years for a Chapter 13. You must make all the payments on time so that your case can move forward.

Some people worry about what life will be like while their case is still open. It is likely going to be much different than it is now because you aren’t fully in control of your own finances. You are going to be on a limited income. You can’t obtain new credit during the bankruptcy proceedings, so you will rely on your income only. There isn’t going to be much wiggle room, at first, for extras.

Despite the inconveniences, a Chapter 13 bankruptcy may be able to help you improve your finances when you have plenty of income but unmanageable debts. The time you spend in bankruptcy means nothing if it can give you a future that’s debt-free and less stressful. For more information, please contact our office.

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How do you know when to file for bankruptcy?

Fri, 27 Jun 2025 21:08:37 GMT

There are many reasons why people might choose to file for bankruptcy. Knowing when to consider this option is important because you don’t want to file if you don’t need to, but you shouldn’t wait too long. There are some specific cases in which filing is the best option that you have.

Some of the markers that point to needing to file for bankruptcy are fairly clear. When you are making your decision, ask yourself these questions :

Do you have a budget in place? You need to know where your money is going and ensure you pay the most urgent bills. Set your budget and rember to follow it.
Can you pay your bills at all? You might be able to get a second job or find another way to pay off creditors. This could save you from the expense and effort of bankruptcy.
Have you tried to negotiate your bills? Creditors will sometimes negotiate with you just for the assurance that you are going to pay. You may have to be honest and let them know that you are considering bankruptcy and tell them about your hardships before they offer you any options.
Are you expecting any financial changes? Many people know when they are expecting to get a bonus or other type of financial boost. It is important for you to review your full financial situation. Look at what’s changed in past few months and see if there is anything that might prevent you from having to file bankruptcy.

You also need to look at the requirements for the case. You will need to go through credit counseling before you file. While needing to file for bankruptcy isn’t anything to be ashamed of, you must ensure that you are using it correctly.

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Know the options you have for getting out of debt

Fri, 27 Jun 2025 21:08:37 GMT

When you are swimming in debt, there is a chance that you will need to find relief because you can’t make the minimum payments on multiple accounts. There are a few options that might be viable in these cases.

One of the first things that you need to do is contact the creditor to let them know about the issue. Ask them if they have any programs that might help you reduce the minimum payment but remember that this might work against you because of the interest.

We know that this is a frightening situation for you to be involved in, but you have to try to push through the fear of trying to find viable ways to handle the situation. If the creditors won’t work with you, it might be possible to get a loan that enables you to pay off the debts and only have to make a single payment each month. This might make it to where you can get everything taken care of in a reasonable time without having to stress too much about your finances.

Another option that we can discuss with you is bankruptcy. This might not be your first choice, but if all else fails or if you just can’t make the payments required to get out of debt, it might be the best option. One positive aspect about filing for bankruptcy is that you can have an automatic stay, which prevents creditors from contacting you to collect money. We can get the process started for you quickly so you can have relief as soon as possible.

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Your situation determines how a bankruptcy will affect you

Fri, 27 Jun 2025 21:08:37 GMT

As the summer months near, some families will be considering taking vacations. Others are more worried about how they will make ends meet. There is a chance that the people in both of these groups will consider bankruptcy before the end of the year. While many people think that bankruptcy is an easy way out of their debts, this is far from the truth.

Whether you just made poor money management decisions or you had to rely on credit to make ends meet because of a life emergency, bankruptcy might be a viable option for reclaiming your finances. You should remember that this is a financially responsible way of handling the matter when you are too far deep in debt to recover and get all the debts paid.

We know that you might have some questions about how you might benefit from a filing and how it might affect you. Since every case is unique, you should look at things based on the circumstances of your life and not based on another person’s. We can help you ensure that what you are basing your decisions on is factual and not just assumption.

If you choose to file bankruptcy, remember that you are going to have to work hard to rebuild your credit. This will take time, so you’ll be unlikely to secure larger credit lines during the rebuilding process. Plus, you can’t obtain new credit lines during the bankruptcy. We can work with you to help you find out exactly how filing may change your life now and into the future.

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Considerations for young adults thinking about bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

Some individuals may associate bankruptcy with older adults, but there are instances in which younger people might need to file. People in their 20s may not realize exactly how this decision can impact them. It is imperative that everyone who is young and considering bankruptcy take the time to evaluate the potential effects.

The years of early adulthood are a time when people should be building up their finances. Making good decisions and handling your money wisely can set you on the right path. Unfortunately, some people might not utilize credit in the appropriate manner and the debts may pile up. This can lead to your having to file for bankruptcy.

Long-lasting effects

One of the most pressing impacts for a person who files early in life is that they might limit their employment prospects. Some employers do credit checks before making offers for employment. A bankruptcy filing remains on your credit report for seven to 10 years , so this can mean that potential employers won’t consider you a good candidate. As you can imagine, this may impact your income. People who want a job in academics, law, insurance and finance might be especially affected.

There is also a chance that the mark on your credit report will make it difficult for you to find suitable housing. Many landlords do credit checks now to ensure that their renters are likely going to pay their rent. The alternative to renting, owning a home, might also be out of reach since your credit has a major part in mortgage decisions.

Set your priorities

You need to get your priorities set correctly so that you can avoid making similar mistakes in the future. Learning how to manage your money and starting a savings account can help set your finances in the right direction. Part of being a responsible adult is becoming self-sufficient so that you are able to survive on your own.

If you are using credit as a young adult, remember that you have to pay back what you borrow. A good rule of thumb is to only charge what you are able to repay when you get paid. Filing for bankruptcy can make it more expensive to get credit. You will have to work on getting your credit score up and your options will be very limited. This can make it hard to get back into being able to make major purchases using credit.

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Determine if Chapter 7 is the right bankruptcy for you

Fri, 27 Jun 2025 21:08:37 GMT

A Chapter 7 bankruptcy is a serious matter that can’t be taken lightly. When you are considering this, be sure that you consider what the process will be like for you, as well as how it might impact you. This type of bankruptcy is also known as the liquidation bankruptcy because your assets will be taken by the trustee and liquidated if they aren’t exempt from the proceedings.

One of the most important things to some individuals who are considering this type of bankruptcy is finding out which of their assets are exempt and which are nonexempt. We can review your case and let you know what category your assets will fall into. Once you know this, you might be able to decide if this is the best option for your needs.

Another consideration is the means test. Not just anyone can file a Chapter 7 bankruptcy case. Your income and assets have to be below a set standard that is based on the mean income for the area. If it is above that set amount, you will have to find out if you qualify for a Chapter 13 bankruptcy. This is one that requires repayment instead of liquidation.

We know that all of this can be a challenge to work through, but we are here to help you. It is imperative that you make decisions that you feel are the best for your needs. The goal is for you to have a fresh financial start. We are here to work with you to find the plan that will make that goal a reality.

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Choosing legal representation for your bankruptcy case

Fri, 27 Jun 2025 21:08:37 GMT

Filing for bankruptcy is a big life decision. When you are making it, you need to make sure that you have accurate information. This can be obtained by seeking the assistance of an experienced bankruptcy attorney. There are many things you need to think about when you are choosing one.

First, you have to be comfortable discussing every detail of your finances with the attorney. Only when they have all the information can they give you the appropriate options that you have for handling the problem. Any misstatement or omission on your part can make a significant difference in the choices you have.

You also need to have confidence in the attorney’s ability to protect your interests. An attorney has to be able to accurately designate assets as either exempt or non-exempt .

If you are filing for Chapter 13 bankruptcy, the attorney can help you work out your repayment plan. This repayment plan will take three to five years to complete in this case, so you need something that you can live with for the long term.

Usually, a Chapter 7 bankruptcy filing is a much shorter process — taking only around six months. This type of bankruptcy doesn’t require you to make repayments, so this isn’t a concern in this type of filing.

The attorney that you choose to handle your bankruptcy filing should understand how all state and other bankruptcy laws apply to your case. This isn’t always easy, but it can prove to be valuable as you make decisions about how you are going to reclaim your financial stability as you move forward.

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Know what to expect when you file for Chapter 13 bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

People who have assets that they want to keep or who have the means to repay a portion of their debts might file a Chapter 13 bankruptcy if they need to reclaim their finances. This form is usually known as the wage earner’s plan since you will be making regular payments to the bankruptcy trustee. Those payments will be used to pay off creditors in a way that is in accordance with the applicable laws.

It is imperative that you are completely honest about your finances when you are filing a Chapter 13. The court has to know that you will be able to afford the payments to the trustee and your regular living expenses. You might not have much left after all of this is paid, but that financial struggle will only persist until your case is discharged.

We know that this might be a lot to think about, but when you think about how much you are paying to individual creditors now, you might realize it is worth it. While your case is in process, you will learn to live on the income you have. You will have time to fine-tune these skills since you can’t obtain new credit while your case is open.

Once the bankruptcy is discharged, you will be able to start rebuilding your credit. This will take a while and will usually require you to get a secured card to start out with. Hopefully, you’ve learned about good credit usage so you can start boosting your financial independence and might be able to avoid future bankruptcy filings.

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Bankruptcy is a legal way to regain control of your finances

Fri, 27 Jun 2025 21:08:37 GMT

Some people think that filing bankruptcy is a negative event in life. This mode of thinking comes from the lax laws surrounding bankruptc filings before they were overhauled. Now, bankruptcy is only a viable option for people who meet specific requirements. With the new guidelines, this is a viable legal option that people can use to get back on a responsible track with their finances. We are here to help you learn about how bankruptcy can help you to move forward and discover the financial freedom you deserve.

Filing bankruptcy isn’t giving up on your debts. Instead, it lets your creditors know that you care about your responsibilities enough that you aren’t going to string them along when you know you can’t pay them. Depending on the chapter you file, you will either make payments to the trustee or your non-exempt assets will be liquidated to pay off your creditors. Whatever balances remain after your payments or after the liquidation will be written off.

One of the concerns that many people have when they file is what will happen afterward. The answer is that it is going to be challenging to rebuild your credit, but it is possible. You will have to learn to live on what you make instead of relying on credit accounts. This will help you as you rebuild your finances since you will learn how to budget the money you make.

The chapter you file depends on a variety of factors. We can review your situation and let you know which one is most appropriate for your fiscal circumstances. From there, we can work with you to ensure you meet the requirements so we can get your case moving forward.

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Avoid making common bankruptcy mistakes

Fri, 27 Jun 2025 21:08:37 GMT

People who are in dire financial straits need to think about options for reclaiming their finances. One option is bankruptcy, but those who are considering this choice must ensure that they aren’t doing anything that is going to negatively impact their case.

Remember that the decision to file doesn’t mean that you are skipping out on what you owe. Instead, this is a legal option that lets you get back on track financially.

Avoid new debts

If you are planning on filing for bankruptcy , don’t take on new debt. Opening up new accounts or making charges might lead to the creditor claiming that you took on the debt without having the intention of paying it back. This may result in that debt not being discharged on the basis of fraud so you would have to pay it off in full.

Only pay normal bills

Your normal bills will still need to be paid, but don’t make any large payments on credit accounts. Making a large payment to a creditor might result in a claim that there are preferential transfers in your case. This means that you have a creditor that received benefits greater than the other creditors. It is possible that they will have the money taken through a lawsuit later. You definitely shouldn’t pay debts that are to family members or friends because of this.

Keep your retirement funds

Almost all retirement accounts are considered exempt in bankruptcy proceedings. Don’t drain those accounts in an effort to pay off debts if you are planning on filing for bankruptcy. It is always a good idea to discuss your case with an attorney prior to touching the retirement account to pay creditors if you want to file.

Always give accurate information

You can’t be dishonest when you file for bankruptcy. Every form you fill out must be factual. Any inaccurate statements are considered fraud and can lead to your bankruptcy being thrown out. In some cases, not being honest can lead to criminal charges.

Some individuals have special considerations. For example, people who are going to get a large sum of money might need to find out how that will impact their case.

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Chapter 7 bankruptcy may help you find financial relief

Fri, 27 Jun 2025 21:08:37 GMT

Being harassed by debt collectors isn’t ever fun. When you simply don’t have the means to pay the bills, it might be time to look into the options that you have to get a handle on your debts. One of these options is filing for bankruptcy, which might not seem ideal, but there is a big benefit for you to think about — the automatic stay.

An automatic stay means that creditors have to stop harassing you. They can’t call you, write to you or send people by to try to collect money. We can only imagine how much relief this could bring to you. You will once again be able to answer the phone and check the mail without having to worry that someone is trying to get money out of you for past-due debts.

One of the types of bankruptcy that you might consider filing is a Chapter 7. This type of filing doesn’t require you to make payments to the bankruptcy trustee. Instead, any nonexempt assets you have will be liquidated by the bankruptcy court to pay off the debts that they can. If there are balances after that is done, they will be discharged.

If you think you need to file for bankruptcy, you should learn about the process. You do have some responsibilities and rights that you should understand before you file. You must take care of your responsibilities or the case won’t be able to be discharged, which means that you won’t continue to enjoy the financial relief that you should. We can help you to review your entire case to find out what you may need to do.

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Exploring your options when past-due bills are weighing you down

Fri, 27 Jun 2025 21:08:37 GMT

Being in debt can cause stress in every area of your life. If you are behind on payments, you might feel guilty about taking any money to do enjoyable things in life. This can make you miserable. Your goal now might be to get caught up on the payments so you don’t have the past due balances clouding your mind. If you are in this position, debt relief solutions might come to mind.

There are many different ways that you can handle this situation. The best one for you to use will depend on your circumstances. One of the first things you should do is contact the creditor to ask if they will set up a payment plan with you that you can afford and that will get you caught up on the bill. There is a chance they will decline, but at least you put forth the effort.

Another option that you might have is to try to obtain a low-interest loan that you can use to cover the past due bills . This would mean that you only have one payment to make each month instead of trying to make multiple ones. Ensure that the loan covers the entire balance and not only the past due amount since you don’t need to add an extra bill to the ones you are already having trouble paying.

Finally, you might choose to file bankruptcy. This might also come with payments. While Chapter 7 bankruptcy uses liquidated assets to satisfy your creditors, Chapter 13 requires you to make regular payments to a bankruptcy trustee who then disburses them to your creditors.

No matter which option you choose, make sure that you think carefully about how it will impact you now and into the future.

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Important considerations for a Chapter 13 bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

Chapter 13 bankruptcy isn’t an easy way out of debt. Many people may falsely assume that once they file, they are done. The fact is that a Chapter 13 filing means that you are going to make regular payments to the bankruptcy trustee. This fact alone makes it a more difficult option than the Chapter 7 filing, which doesn’t require any payments be made to the trustee.

Most Chapter 13 bankruptcy plans require payments for three to five years. The issue here is that there are many variables that might come up during that time that could change your ability to make the payments to the trustee. It is possible that you might have some flexibility built into your repayment plan; however, this can often be difficult to handle ahead of time.

Make sure that you are prioritizing your payments to the trustee. If you don’t make these according to the plan, your bankruptcy can be tossed out and you won’t be able to count on the financial protection it provides. You also have to ensure that you are paying your other bills for the duration of the case.

Another consideration is that your payments may be made through a direct payroll deduction. If you change employers, you will have to update this. Alternatively, you might be able to ask to pay the court directly. Typically, this option is reserved for people who are in danger of losing their job due to the bankruptcy filing, and those who are facing other challenges related to their employer knowing about the filing. Just remember that bankruptcy filings are public records, so your boss might already be aware of the filing.

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Use bankruptcy as a turning point in your financial attitude

Fri, 27 Jun 2025 21:08:37 GMT

Your bankruptcy process is one that isn’t going to be over in just a few days. If you file a Chapter 7, you will likely have a discharge faster than someone who files a Chapter 13. This is because the people who file the latter option will have to make payments to the bankruptcy court before the case is discharged.

This is something that we want our clients to know. You can make the decision to file for bankruptcy quickly, and you can get the process started fairly quickly; however, this isn’t going to be instantaneously. You have to be willing to work through the process and ensure that you are getting your responsibilities handled so that you can enjoy the protections soon.

We realize that you might want to know more about what makes the process take a while. We can walk you through what to expect. We can help you think about how this might impact your life right now so that you can make sure that you are able to handle it. We will also work with you to determine how your future might be affected. This can help you verify that you are ready to go through the bankruptcy process.

While you are going through bankruptcy, you need to pay close attention to the financial pointers you are receiving. You will learn to live only on your own income without the help of extra credit accounts. This lesson, along with the budgeting you will learn, can help you truly enjoy financial freedom in the future.

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Tips for enjoying financial freedom after bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

Filing for bankruptcy is a difficult step that some people take to get out of debt. If you are thinking of taking this step, make sure that you understand what life is going to be like after the filing.

It is imperative to take steps to shore up your finances during the bankruptcy. You also have to learn the discipline that helps you follow the steps that you need to take once you file. All of this can work together to help you have the best financial life possible from here on out.

Check your credit repo rt

Your credit report is going to take a hit due to the bankruptcy. Since many, or all, of your debts are going to be relieved in the bankruptcy, make sure that those accounts are accurately reported. When the bankruptcy is discharged, the accounts should reflect that. Continue to check your credit report throughout the rest of your life. This is a good opportunity to see how debts are impacting you, as well as ensuring that you aren’t the victim of identity theft. If you see accounts that aren’t yours, report them and find out what is going on.

Set your budget and stick to it

Your budget is your financial lifeline. Set this up based on your income. You can’t have credit accounts during your bankruptcy unless you have the court’s approval. Throughout the case, you have to be able to pay your normal bills and the ones related to your case only on your household income. By setting your budget now and getting used to living in this manner, you can achieve financial freedom.

Rebuild your credit

While you can’t rebuild credit until after the discharge, you can get to work soon after. You will likely have to start with a secured credit card. Slowly, you can start adding other forms of credit. Just remember that these might come with higher interest rates due to your current credit status. Only charge what you can pay off when the bill comes due. You should try not to carry balances since this might lead to another financial crisis.

Save money in an emergency fund

Your emergency fund is another key to future success. You need to start saving now, no matter how small the deposits into your savings. Ultimately, you need to work toward an emergency fund that covers your expenses for at least three to six months.

If you are overwhelmed by debts, you need to take a hard look at your financial state. If you know that you just can’t get past these, bankruptcy might be your best option. Look into the two types of consumer bankruptcy to determine which is the most appropriate for your needs.

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Understand what happens when you go through bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

When your credit card and other bills become so overwhelming that you are having to figure out what to pay and what to let lapse, it might be time to consider your options for reducing the debt loan. You mustn’t fall for scams and shams when you are in this position. Instead, you need to look into the legal ways to handle your debts. Bankruptcy might be the answer to your problem.

People who need to file for bankruptcy protection will need to look into the requirements for the type of case they want to pursue. For most consumers, there is the working man’s bankruptcy, which is Chapter 13, or liquidation bankruptcy , which is Chapter 7.

In Chapter 13, you would make payments to the bankruptcy trustee to pay off all or most of the debts you owe. While you don’t make those payments in Chapter 7, your nonexempt assets are liquidated to cover some of the debts you owe. Once your case is over, it will be discharged. At this time, the debts included in the case will be forgiven if any balances remain. You expect Chapter 7 to be over much faster, usually in three to six months. The repayment plan for Chapter 13 usually lasts three to five years, so the case can’t be discharged until then.

Both types have specific requirements. For example, you can’t have income and assets over a specific amount for Chapter 7. You have to be able to make payments to the court and can’t have debts over a certain limit for Chapter 13. While this might seem confusing, it isn’t when you work with someone who is familiar with the laws governing this type of financial protection.

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Make a plan for handling Christmas credit card debt

Fri, 27 Jun 2025 21:08:37 GMT

Christmas debt is something that many Americans will accumulate at the end of the year. While there isn’t really anything wrong with this, there is sometimes a problem in January when the credit card bills start coming in. This might bring up the question of how to handle that debt so that you can get the cards paid off quickly.

The method you use is going to depend on your situation. You must ensure that you know what balances you carry on your cards. This gives you an idea of what you are going to have to do to get it paid off. You can use this information to set a budget that enables you to get the balances down.

Try to pay more than just the minimum balance. When you only pay the minimum required, you will be paying the card off for a long time. Instead, set your budget up so that you can put as much as you can toward your credit card balances.

For some people, the realization of the amount of debt they are in is a signal that they need to do something more drastic. In these cases, finding a credit card consolidation company might be necessary. Alternatively, they might choose to file for bankruptcy.

When it comes to your finances, you have to think carefully about what you are going to do. Your decisions now can have a huge impact on your future. Make sure that you aren’t making rash decisions, but don’t wait so long to do something that your situation gets too dire.

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Reclaim your financial stability through bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

Filing for bankruptcy isn’t something that most people want to do during their adult life. When you are in debt so deep that you can’t find a way to pay at all, you might need to consider bankruptcy. The type of case you file determines what you will have to do.

If you have an income that allows, you might file a Chapter 13, which requires you to make repayments to the court. Those payments are divided up by the bankruptcy trustee and sent to your creditors. Some people prefer this type of bankruptcy since they are still paying their debts. Some people might not qualify if their income isn’t enough to cover these payments and the regular life expenses they have.

We understand that you have a lot of things that you need to know before you make a decision about filing. Taking the time to understand exactly what is going to happen and learning about how the filing will impact your life might make your decision a bit easier. Still, make sure that you aren’t taking too long. There isn’t any sense in you feeling the financial stress for longer than what is absolutely necessary.

If you are ready to file and reclaim your finances for the new year, we can help you get started. You don’t have to wait to do this. We can help you get moving as soon as you decide that this is the best decision for your finances, so you can start to enjoy the peace that comes with knowing you’ve done what you need to do.

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Types of debt covered in a Chapter 13 bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

One of the possible consumer bankruptcy chapters that some people file when they need this protection is Chapter 13. This is known as the wage-earner’s bankruptcy because debtors have to set up a repayment plan that covers some of the debts they owe. In most cases, the payment schedule will coincide with the debtor’s pay schedule.

Understanding which debts must be paid under this type of bankruptcy can help you to determine whether this is the right decision for you or not. There are three types of debts that apply to these cases — secured, unsecured and priority. Each debt you have is placed into one of these categories.

Secured debts are backed by assets, such as vehicle loans or mortgages. These must be paid in full as part of the repayment plan you set up with the bankruptcy trustee.
Unsecured debts aren’t backed by assets. Credit card and medical debts fall under this category. You must repay at least part of these debts in your repayment plan.
Priority debts include things like back taxes and child support arrearages. These must be paid in full during the bankruptcy proceedings.

Once your bankruptcy repayment plan is determined, you must comply with it. If you miss a payment, there is a chance that your case might be dismissed by the bankruptcy court. This would allow creditors to start collection attempts again. It might be possible to avoid this from occurring, but you should explore the possibility right away if you know you are going to miss a payment.

Don’t start 2019 off mired in debt. Learn how you can use a bankruptcy filing to your advantage in the new year.

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Know the qualifications for a Chapter 7 bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

Sometimes, a person who is deep in debt won’t have any assets or available money to pay off what they owe. Even making minimum payments is a big struggle. In these cases, a Chapter 7 bankruptcy might be in order, but only if the person can pass the means test. This is a set of guidelines that looks into a person’s financial situation to determine whether they are allowed to file this type of bankruptcy or have to go with a different option.

We know that you might have some concerns about this. We can help you find out if you do qualify. If you do, we will help you find out about the process so that you know what to expect. The more you know, the better you might fare during it.

One thing to remember about a Chapter 7 filing is that you don’t have to make regular payments to the bankruptcy court. Instead, the bankruptcy court will use your nonexempt assets to pay off what it can from the creditors. If there are balances left, they will be written off.

The alternative to this is usually a Chapter 13 bankruptcy, which involves making payments to the bankruptcy court. These are split between your creditors based on a preset list of priorities. Once you make all the payments you are required to make, any balance remaining will be written off by the creditor.

This is a big decision for you to make. We are here to help you determine if a Chapter 7 bankruptcy filing is something you want to do.

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Higher income levels can also lead to higher levels of debt

Fri, 27 Jun 2025 21:08:37 GMT

Many people inaccurately believe that only people with low income levels struggle with debt. Nothing could be further from the truth. Individuals with low income and bad credit typically can only receive a small amount of money on credit. Even if they secure multiple different forms of credit, from car loans to credit cards, their income will limit how much lenders are willing to give them.

Individuals with higher income levels are at risk of receiving far more credit, which can lead to substantially overextending themselves. Higher-income individuals are also more susceptible to the desire to keep up with the Joneses. In other words, when you work in a high-profile and high-paid position, you are more likely to spend money on expensive clothing and fancy vehicles.

People with higher incomes can easily find themselves in a financially precarious position as a result of spending on credit. Even people making well above the average wage in Wisconsin could still find themselves unable to handle their crippling debt load.

Higher overall income doesn’t preclude bankruptcy proceedings

Another assumption many people make is that bankruptcy is only available to those who have low income. While it is true that regulations limit the income of individuals who file for Chapter 7 bankruptcy, that is not your only option for discharging debt in the United States.

The cutoff for Chapter 7 bankruptcy is the state median income, which may be substantially lower than your income. However, that doesn’t mean you have to struggle indefinitely to pay your bills while sinking deeper and deeper into debt.

You can still qualify for Chapter 13 bankruptcy even if your income is multiple times the state median income. Chapter 13 bankruptcy, also known as a wage earner’s plan, is a viable option regardless of your level of income or how many assets you have accrued as an adult.

Chapter 13 bankruptcy allows you to restructure and reorganize debt

Unlike Chapter 7 bankruptcy, which allows for the discharge of all unsecured debts following a waiting period and a creditor hearing, Chapter 13 bankruptcy requires scheduled repayments for some time.

Typically, the repayment period lasts between three to five years. During this time, you will have to pay a specific amount to the courts every month, which the courts will determine in the early stages of the process. The courts will then distribute those payments to your creditors.

So long as you follow the repayment plan as written, at the end of that period, you will receive a discharge of the remaining balances on all of those unsecured accounts. Even if your income is substantially higher than the average in your state, Chapter 13 bankruptcy can allow you the opportunity to start over financially.

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Beware of debt relief scams

Fri, 27 Jun 2025 21:08:37 GMT

Some people try to do anything they can to avoid having to file for bankruptcy. While this is a good thing for many, it is imperative that you make sure that you have a viable option that isn’t going to lead to you being scammed. There are some unscrupulous companies out there that prey on your desire to avoid bankruptcy.

One of the best things that you can do if you are in this position is to review the credit counseling or debt relief agency you are considering working with. While there are some that will do what they are promising, you should avoid ones that make promises that seem too good to be true.

Sometimes, these companies do nothing more than just call the creditors to see if they can get them to accept a lower total if you pay the balance in full. This is something that you don’t need to pay someone to do as you can make that call yourself. Plus, there is a chance that you won’t be able to pay it all off in one quick payment.

A common scam that these companies run is that you must pay the fees upfront for their service. They then tell you that you must pay monthly payments to them, and they will disburse the payments. The issue here is that the money you give them each month never makes it to the creditors.

When you are looking for a company to use, find one that offers credit counseling and budget assistance. Check out the pay schedule. You shouldn’t be charged a large amount upfront. Sometimes, you will have a small fee, but the initial consultation is usually free.

If you are taking the time to review credit repair and counseling services, you should make sure that you explore all the options you have. One of these is to file for bankruptcy, which might be a feasible option for you.

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Regain control of your finances with bankruptcy

Fri, 27 Jun 2025 21:08:37 GMT

Your finances should be able to help you live the life you deserve. They shouldn’t be a source of constant stress. If you never have enough money to cover your bills, it is probably time for you to make some tough choices. One of these is whether you are going to continue to struggle to pay off debts or if you are going to file for bankruptcy.

Just to be clear, bankruptcy isn’t an easy answer to your money woes. Instead, this is something that is going to take time and effort. You will have to go through counseling and take other steps before you will have the case finished.

There are several considerations that you need to think about before you file. These can impact your life now and might have longer-lasting ones. For example, your credit report will reflect the fact that you did seek bankruptcy relief. This alone can make it more difficult for you to get credit in the future.

We understand that you might feel like you don’t have any options right now. While bankruptcy isn’t usually anyone’s first choice, it can certainly help you regain control of your finances. Once you have this handled, your stress may decrease so that you can enjoy your life again.

If you are ready to file, be prepared to provide an accurate account of your financial situation. The court requires you to do this so that it can determine if you are eligible to file. Don’t worry – we are here to help you with this part of the case, as well as any others that need to be addressed.

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Facing Car Repossession in Wisconsin? Understanding Your Rights and Options

Thu, 14 Mar 2024 18:55:00 GMT

Falling behind on car payments can be a stressful experience, and the threat of repossession adds another layer of worry. If you reside in Wisconsin and are facing car repossession, understanding the legal process and your rights is crucial. This blog post aims to provide a general overview of the car repossession process in Wisconsin, but it is not a substitute for legal advice.

When can repossession happen?

In Wisconsin, your lender can only repossess your car if you are in “default” on your loan agreement. This typically means you are more than 10 days late on more than one full monthly payment. However, the specific definition of default might vary depending on your loan agreement.

Before repossession: The right to cure

Before the lender can repossess your car, they are legally obligated to send you a written notice called a “right to cure notice” by mail. This notice informs you of the alleged default and your right to bring your loan current within 15 days of receiving the notice. To “cure” the default, you need to pay all missed payments and any associated late fees.

Wisconsin repossession laws and procedures

Once the 15-day cure period has passed, the lender has two options to repossess your car:

Self-help repossession: They can repossess the car without a court order, as long as they follow specific legal guidelines. These include:
Repossessing the car from a public place like a parking lot or street. They cannot take it from a private property like your garage or driveway without your permission or a court order.
Avoiding a breach of peace. They cannot use force or threats of violence during the repossession.
Providing you with a written notice within 10 days of repossession, informing you of your rights, including the right to redeem the car.
Court-ordered repossession: The lender can file a lawsuit and obtain a court order to repossess the car. This process may take longer but allows the lender to repossess the car from any location, including your private property.

What happens after repossession in Wisconsin?

After the car is repossessed, the lender will store it in a secure location. You have the legal right to redeem your car by paying the full amount owed on the loan, plus any towing and storage fees.

However, if you don’t redeem the car within a certain timeframe (typically 30 days), the lender will sell the car at an auction. The proceeds from the sale will be used to pay off the remaining loan balance, and any leftover amount might be returned to you. If the sale doesn’t cover the entire loan amount, you may still be responsible for the deficiency.

Protecting yourself from repossession in Wisconsin

If you are facing car repossession, it’s crucial to act quickly. Here are some steps you can take:

Contact your lender immediately: Explain your situation and explore options like payment extensions or loan modifications.
Seek legal advice: An experienced attorney can guide you through your rights and options, including negotiating with the lender or filing for bankruptcy protection.
Explore alternatives: Consider selling the car yourself to pay off the loan balance and avoid repossession.

Remember: This blog post is for general informational purposes only and should not be interpreted as legal advice. If you are facing car repossession in Wisconsin, it’s highly recommended to consult with a qualified attorney to discuss your specific situation and receive tailored legal guidance.

Feel free to reach out below to discuss your options. The post Facing Car Repossession in Wisconsin? Understanding Your Rights and Options appeared first on Helbing Law Office, LLC .

When Repossession Turns Unlawful: Protecting Your Rights in Wisconsin

Thu, 14 Mar 2024 18:48:00 GMT

Facing car repossession is a stressful experience, but what happens when the repossession itself is unlawful? In Wisconsin, specific laws protect debtors from unfair practices during the repossession process. This blog post, aimed at informing Wisconsin residents, outlines the legal parameters of car repossession and your rights when faced with an unlawful repossession. It’s important to remember that this post should not be considered legal advice, and you should consult with an attorney for personalized guidance in such situations.

Understanding repossession laws in Wisconsin

In Wisconsin, car repossession can only occur when you are deemed in “default” on your loan agreement. This typically means you are more than 10 days late on more than one full monthly payment. However, the exact definition of default can vary depending on the specific terms of your loan agreement.

Before repossessing your car, the lender is legally obligated to send you a written notice called a “right to cure notice” via mail. This document informs you of the alleged default and your right to bring your loan current within 15 days of receiving the notice. To “cure” the default, you need to pay all missed payments and any associated late fees.

What constitutes unlawful repossession?

Even when you’re in default, the lender’s actions during repossession are subject to specific legal guidelines. If the lender violates these guidelines, the repossession can be deemed unlawful. Here are some key points to understand:

Repossession Location: The lender can only repossess your car from a public place like a parking lot or street. They cannot take it from a private property like your garage or driveway without your permission or a court order.
Breach of Peace: The lender cannot use force or threats of violence during the repossession. This includes physical force, threats of physical harm, or breaking into your car.
Proper Notice: Within 10 days of repossession, the lender needs to provide you with a written notice informing you of your rights, including the right to redeem the car.

Protecting yourself from unlawful repossession in Wisconsin

If you believe your car has been unlawfully repossessed, here are some steps you can take:

Contact your lender immediately: Explain the situation and inquire about the reason for repossession. If you believe they might have violated any legal guidelines, express your concerns clearly.
Consult with an experienced attorney: A lawyer specializing in consumer rights can guide you through your legal options, which may include filing a lawsuit against the lender, seeking damages for emotional distress or lost wages, or arguing to have your car returned.
Gather evidence: Document everything related to the repossession, such as dates, times, locations, and any interactions with the lender. Collect any communication received, including the right to cure notice and the repossession notice.

Additional considerations:

While this blog post provides a general overview of unlawful repossession in Wisconsin, it’s crucial to understand that specific details and legal interpretations can vary based on your unique situation. Here are some additional points to consider:

Statute of limitations: There is a limited timeframe within which you can file a lawsuit against the lender for unlawful repossession. Consulting an attorney promptly is crucial to ensure you adhere to these deadlines.
Damages: Depending on the severity of the unlawful repossession, you might be entitled to various types of damages, such as the value of your car, lost wages due to transportation issues, or compensation for emotional distress. Your attorney can advise you on potential avenues for pursuing such compensation.
Seeking alternative solutions: While legal action is an option, exploring other solutions like negotiating a payment plan with your lender or selling the car yourself to pay off the loan might be preferable in some situations. Your attorney can guide you through the pros and cons of various options.

Conclusion

Facing car repossession is undoubtedly stressful, and encountering an unlawful repossession adds another layer of complexity. Understanding your rights in Wisconsin and taking prompt action are crucial. This blog post aims to be a starting point, but remember, consulting with an experienced attorney specializing in consumer rights is essential to navigate the legal complexities of unlawful repossession and pursue the best course of action for your specific situation.

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How Much Can I Claim in Bankruptcy Exemptions in Wisconsin?

Thu, 14 Mar 2024 18:39:00 GMT

Facing overwhelming debt can be a stressful and frightening experience. If you’re considering filing for bankruptcy in Wisconsin, one of your primary concerns might be protecting your assets. Wisconsin, like all states, offers bankruptcy exemptions that allow you to shield certain valuable items from liquidation during the bankruptcy process. This blog post will explain the specifics of Wisconsin’s bankruptcy exemptions, helping you understand how much you can claim and keep hold of.

Types of bankruptcy exemptions in Wisconsin:

Wisconsin provides two sets of exemptions you can choose from:

Wisconsin Exemptions: These exemptions are specific to the state and offer protection for various categories of property.
Federal Exemptions: The federal bankruptcy code also offers a set of exemptions. You can choose to utilize these exemptions instead of the Wisconsin ones, but generally, the state exemptions provide more generous coverage.

Here’s a breakdown of the key Wisconsin bankruptcy exemptions:

Homestead Exemption: This exemption shields a portion of the equity you have in your primary residence. The exemption amount is $75,000 for a single filer and doubles to $150,000 for married couples filing jointly.
Motor Vehicle Exemption: You can exempt up to $4,000 of equity in a motor vehicle. Married couples filing together can double this amount to $8,000. It’s important to note that the equity refers to the fair market value of the vehicle minus any outstanding loan amount.
Wild Card Exemption: Wisconsin offers a “wild card exemption” that allows you to protect up to $12,000 of your personal property. This exemption can be used for various household items like furniture, appliances, electronics, clothing, and jewelry. The unused portion of this exemption can also be applied towards your motor vehicle if its equity value exceeds the dedicated motor vehicle exemption.
Other Exemptions: Wisconsin offers additional exemptions for specific categories of property, including:
Up to $5,000 of equity in savings accounts and checking accounts (doubles to $10,000 for married couples filing jointly)
Up to $50,000 of personal injury awards
Tools of the trade used for your profession (up to a specific value)
Certain types of retirement savings accounts (with limitations)

Choosing the right exemptions in Wisconsin:

When filing for bankruptcy, your attorney will advise you on the best course of action regarding exemptions. Generally, it’s recommended to choose the exemption set that offers the most protection for your assets. Consider the value of your property and which set of exemptions will best shield your belongings from liquidation.

Important exemption considerations:

Exemptions Apply Only to Equity: It’s crucial to remember that exemptions only protect the equity you have in your property, not the total value. For example, if your car is worth $10,000 and you still owe $8,000 on a loan, the exemption would only shield the remaining $2,000 of equity.
Exemptions Have Limits: The exemption amounts mentioned above are maximums. The actual value you can claim might be lower depending on the specific circumstances of your case.
Consult with a Bankruptcy Attorney: Bankruptcy laws are complex, and navigating the exemption process can be challenging. Consulting with a qualified Wisconsin bankruptcy attorney is essential. They can assess your financial situation, explain the exemptions in detail, and help you develop a strategy to maximize your asset protection.

Conclusion

Wisconsin’s bankruptcy exemptions offer valuable protection for your assets during a bankruptcy filing. By understanding the types of exemptions available and their corresponding limits, you can make informed decisions about which ones to utilize.

Feel free to reach out below and we can discuss your options.

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Facing Creditor Contact During or After Bankruptcy?

Thu, 22 Feb 2024 18:23:00 GMT

If you’re struggling with debt, you’re likely familiar with protections against creditor harassment. But what happens if they contact you during or after bankruptcy? Here’s what you need to know:

Protections during bankruptcy:

Automatic Stay: Filing triggers a court order prohibiting creditors from collection activities like contacting you, suing you, or repossessing collateral.
Violation Remedies: If a creditor violates the stay:
You can request the court to order the return of repossessed property.
You may be entitled to compensation for losses, attorney fees, and emotional distress.
The court can impose sanctions like fines for contempt of court.

Protections after bankruptcy:

Discharge: Completing bankruptcy discharges most debts, meaning you legally don’t owe them anymore.
Discharge Violation: If a creditor attempts to collect discharged debts:
You have similar rights as during stay violations, including seeking compensation and attorney fees.
The creditor may face court sanctions.

Things to remember about creditor contact:

Most creditors respect the law, but violations can occur.
Fighting back against violations typically doesn’t cost you anything upfront, as attorney fees may be recovered.
Seek legal advice: An experienced bankruptcy attorney can guide you on your options and ensure your rights are protected.

We can help you navigate the legal landscape and enforce your rights effectively. Don’t hesitate to reach out to us if you’ve experienced creditor harassment during or after bankruptcy.

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Inherited IRAs in Wisconsin: Not Exempt from Bankruptcy

Thu, 22 Feb 2024 18:00:00 GMT

Filing for bankruptcy can be a daunting process, especially when navigating asset protection. While Wisconsin offers exemptions safeguarding specific assets during bankruptcy, a recent case sheds light on a crucial distinction: inherited IRAs may not be exempt.

Understanding the exemption:

Federal law typically exempts individual retirement accounts (IRAs) owned by the debtor or inherited from a spouse. However, a recent Wisconsin case challenged this. A resident filed for bankruptcy, claiming a $300,000 inherited IRA as exempt. Both the bankruptcy court and the Seventh Circuit Court of Appeals denied the exemption because the IRA wasn’t considered the debtor’s “retirement funds.”

The case made its way to the Seventh Circuit Court of Appeals who agreed with the bankruptcy judge.

Under Sections 522(b)(3)(C) and (d)(12) of the Bankruptcy Code, retirement funds are considered exempt properties and bankruptcy creditors cannot get their hands on these funds. These retirement funds are exempt under bankruptcy law to the extent that they are in a fund that is also exempt from taxation under several specific sections of the Internal Revenue Code of 1986.

Other exemptions under bankruptcy laws include up to $20,000 in homestead equity, up to $3,225 in automobiles and personal properties such as jewelry, furniture and clothing up to a certain amount.

Key takeaway:

This case highlights the importance of understanding specific exemptions and how they apply to inherited assets. While traditional IRAs owned by the debtor are generally protected, inherited IRAs might not be.

Seek Professional Guidance:

Bankruptcy laws are intricate, and navigating exemptions effectively requires expert guidance. Consulting a bankruptcy attorney can help you:

Understand the nuances of various exemptions applicable to your situation.
Strategize to maximize asset protection within legal boundaries.
Avoid potential pitfalls like the one faced by the Wisconsin resident in the mentioned case.

Remember, bankruptcy doesn’t automatically mean losing everything. By seeking professional legal advice, you can make informed decisions and protect your assets during this challenging financial period. If you are interested in learning more please reach out and we can discuss your options.

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Understanding Wage Garnishment in Wisconsin: Protecting Yourself During Financial Hardship

Thu, 22 Feb 2024 17:40:00 GMT

Many Wisconsin residents are facing financial difficulties, struggling to make ends meet even with employment. This situation can lead to debt collection tactics like wage garnishment, which can further strain your finances. Understanding the process and your available defenses is crucial.

What is wage garnishment?

Wage garnishment allows a creditor with a court judgment against you to collect unpaid debts directly from your paycheck. This occurs after the creditor obtains a court order confirming your debt and files a garnishment notice.

The garnishment process:

Court Judgment: The creditor sues you and obtains a court judgment for the owed amount.
Garnishment Notice: The creditor files a garnishment notice with the court, initiating the wage withholding process.
Service of Papers: You and your employer receive legal documents explaining the garnishment, your rights, and an option to file an answer contesting the garnishment.
Debtor’s Response: You have the right to file an answer claiming exemptions or disputing the debt’s validity. If no response is filed, the garnishment proceeds.
Wage Withholding: Your employer starts withholding a portion of your wages, typically lasting 13 weeks, unless both parties agree to extend.

Defending against garnishment:

Wisconsin law protects a portion of your income from garnishment:

Maximum Withholding: Generally, creditors can only garnish 20% of your net pay and only one creditor at a time.
Poverty Exemption: If your household income falls below the federal poverty level, your wages are fully exempt.
Partial Exemption: If garnishment would push your income below the poverty line, only the excess amount is subject to withholding.
Public Assistance: Individuals receiving or approved for public assistance within six months are automatically exempt.

Seeking legal help:

While these exemptions offer protection, debt issues can be overwhelming. Consider these options:

Consult an attorney: An experienced Wisconsin debt relief attorney can advise you on your specific situation and explore options like debt negotiation or bankruptcy, which can offer a fresh financial start.
Credit counseling: Non-profit credit counseling agencies can provide guidance on managing debt and creating a budget.

Remember, facing wage garnishment doesn’t have to be a solitary battle. Resources and legal support from Helbing Law Office are available to help you navigate these challenges and regain financial stability. Get in touch with Timothy Helbing today.

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Some Common Questions About Bankruptcy

Fri, 26 Jan 2024 17:35:00 GMT

Individuals file for bankruptcy for a myriad of reasons. It is easy to dismiss bankruptcy as simply a vehicle for those who made poor financial decisions. While this is true for a small fraction of cases, who among us is immune to poor decisions? Whom among us wants to be judged by our mistakes? In truth, bankruptcy is often dismissed until you need it. I think about it this way. How many unsolicited credit card applications do you receive in the mail? Imagine if you were living paycheck to paycheck; you or a loved one was in a serious accident; or a serious health condition has been diagnosed? Would you take advantage of these unsolicited credit card offers?

I have been practicing bankruptcy law for over 20 years. I have learned many things over the years, but the one lesson I have followed the most is this. The best decisions are the ones made after reviewing as much information as possible. Below are some of the most common questions I am asked with a brief explanation.

What exactly is bankruptcy anyway? Bankruptcy is completely voluntary. In most cases, individuals have reached their breaking point and are simply overwhelmed by their debt. Filing for bankruptcy offers protections from creditors. It stops the endless calls from collection agencies. Wage garnishments and foreclosure actions are halted while the bankruptcy is proceeding. At the end of the process, filers will receive a discharge and be granted a fresh start.
Should I file for bankruptcy? As previously mentioned, are you at your breaking point? Are you being pursued endlessly by collection agencies? Are you using your credit cards for necessities. Are you entering high interest loans just to get by? If you answered yes to any of these questions, you should contact a bankruptcy attorney at a minimum.
Will I lose my house, car, or other property? The purpose of bankruptcy is not to make you destitute. It isnâ€™t designed to rob you of necessities. The bankruptcy code offers exemptions to protect your property. Most states offer exemptions as well. These exemptions are designed to allow you a basic standard of living. In my experience, it is extremely rare to lose anything other than debt in bankruptcy.
Will my credit be ruined forever? No. Most people who file for bankruptcy already have low credit scores. If you have a credit score in the 700s, it will be impacted. However, bankruptcy is not a scarlet letter that follows you for the rest of your life. Assuming you establish a good credit history moving forward, e.g. making your payments on time every month, your credit score will rebound. Also, bankruptcy can only be reported on your credit report for up to eight years.
Can I buy a house after filing bankruptcy? Each lender has their own rules regarding mortgages. FHA, for example, require two years and a credit score in the 600â€™s. Fannie Mae has stricter lending rules. However, you need to demonstrate a good credit history since the filing of bankruptcy.

Deciding to declare bankruptcy is a difficult decision. It should not be taken lightly. However, if you know someone who filed bankruptcy and received a discharge, ask them their thoughts on the subject. Has their life improved? I am willing to bet that theyâ€™ll tell you it was the best decision they ever made. If you would like more information regarding bankruptcy, or would like more detailed answers to these questions or different questions, please contact me.

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Tax Refunds: How Doing the Right Thing Can Have the Wrong Result

Fri, 12 Jan 2024 13:24:00 GMT

In a letter to Jean-Baptiste Le Roy in 1789, Benjamin Franklin famously stated "[o]ur new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes." This prophetic statement has withstood the test of time.

With the new year comes the obligation to file our annual tax returns. In Wisconsin, as in many other states, we have the privilege of filing both state and federal taxes returns. For many, this annual exercise results in a return of their interest free loan to the government in the form of a tax refund. If you are reading this post and considering bankruptcy, this post is meant to explain what not to do with your tax refund.

Preferential payments, or preferences, are payments made to a creditor prior to a bankruptcy being filed that results in the creditor receiving more than they would have received in the bankruptcy. There are a few requirements for preferences: first, the creditor must receive money from the debtor. Secondly, the payment must have been for a debt that existed before the bankruptcy was filed. There are also certain benchmarks that need to be met. For general unsecured creditors, the amount received by the creditor must be greater than $600 and, for insiders (most commonly family members and friends), there is no monetary limit.

So, how are tax refunds considered preferences? If, in the 90 days prior to filing bankruptcy (one year for insiders), you use your tax refund to pay a single creditor more than $600, it is considered a preference. The bankruptcy trustee will then be able to recover those monies and divide the money equally amongst all your creditors. For example, you receive a total of $2,200 in tax refunds. Your father loaned you $1,500 last year to get caught up on some bills, so you pay him back before filing your bankruptcy. Oops! This payment has now become a preference that is recoverable by the bankruptcy trustee. Your father must turn over the $1,500 for it to divided amongst your creditors. Failure to do so could result in a money judgment against your father.

How can you avoid this happening? First, do not pay back your father. Keep the money in your bank account until after the bankruptcy has concluded. The first $5,000 ($10,000 if you are married) in your bank account is exempt, so it is protected from both your creditors and the bankruptcy trustee. Once the bankruptcy has concluded, pay back your father. How you decide to use the exempt funds in your bank account after the bankruptcy has concluded is no one's business.

When it comes to preferences, timing is everything. If you are considering bankruptcy, contact me prior to paying any debts with your tax refund. When done correctly, bankruptcy can completely change the trajectory of your life moving forward.

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The High Cost of Borrowing Affects Businesses and Consumers

Thu, 04 Jan 2024 18:04:00 GMT

Yesterday, I came across this article that immediately caught my attention. The title of the article was "Jaspreet Singh: Why 'Fake Rich' Americans Are Going Bankrupt. Now I have neither heard of Jaspreet Singh, nor do I believe that I have ever represented a "fake rich" debtor. But I do believe there is some truth to what was discussed in this article.

During the pandemic, many consumers purchased luxury items due to the low interest rates. Such items as Rolex watches, Mercedes Benz G Wagons, and recreational vehicles were purchased under the belief that these would be good investments. However, in March of 2022, these types of assets began crashing in value. It is now difficult for these "good investments" to be sold, let alone for a profit. And this wasn't just a consumer problem. We have even seen this phenomenon within the banking industry as well. Banks invested heavily in low-yielding Treasury bonds. Now with the Federal Reserve's aggressive interest rates increases, these investments are yielding less returns. The banks are sitting on a potential $650 billion mess. I'll be watching to see how this all sorts itself out.

In the meantime, how does this affect consumers and their purchasing behavior? The high borrowing costs do not just impact one's ability to purchase a home or car. Decreases in other areas are necessary to offset the higher cost of owning a home or new vehicle. With price increases at the grocery store, increased cost of heating your home, and property tax increases, to name a few, at what point do consumers reach their breaking point? Decreases in consumer spending affect businesses and their bottom line. How do businesses respond? By raising prices even more.

The optimist in each of us believes these conditions will turn around shortly, but the cynic knows differently. Sometimes, the hardest part is acknowledging that you cannot continue under this current environment. We all reach our breaking point eventually. If you find yourself living beyond your means. If you cannot keep pace with the current economic environment. If it is getting harder and harder to meet your monthly expenses, then it may be time to consider bankruptcy. At a minimum, speak with a bankruptcy attorney to discuss your available options. I am always willing to discuss your options.

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