We Are Here For You In Appleton 920-659-5606

We Are Here For You In Appleton 920-659-5606

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Do Not Be Overwhelmed By Your Debts

Common Myths About Bankruptcy

I will lose everything I own.

Wisconsin residents have the option of claiming either the federal or state exemptions. Which one is used depends on the value of the property owned by you. In either event, the law allows you to maintain a basic standard of living. As a result, it is very unlikely that you will lose any personal property.

All of my debt will be eliminated.

Not quite. For the most part, all unsecured debt is discharged in the bankruptcy. However, certain types of debt survive the bankruptcy or are very difficult to have discharged. They include student loans, criminal restitution or fines, child support and alimony and debts incurred as a result of fraud.

I can keep certain credit cards.

When the bankruptcy is filed, you certify under penalty of perjury that all your debt has been accurately listed. Once the discharge is granted, you have no legal obligation to pay back the debt. However, nothing prevents you from voluntarily paying debt that was discharged if you feel so inclined.

Bankruptcy remains on my credit report for 10 years.

For the most part this is true. There are some instances where a dismissed Chapter 7 or 13 may only show up on your credit report for seven years; however, a good rule of thumb is 10 years.

I can’t file bankruptcy more than once.

Not true. If you receive a discharge in a Chapter 7 bankruptcy, you must wait eight years from the date you filed the bankruptcy to file Chapter 7 again. In the event that you need to file bankruptcy sooner, you may file Chapter 13 before that eight-year period has expired. However, if it has been less than four years since you filed Chapter 7, you will not be entitled to another discharge.

Everyone will know I filed bankruptcy.

While most legal proceedings are a matter of public record, it is very unlikely anyone will find out about your bankruptcy filing unless they are a creditor of yours or you tell them. Bankruptcy filings are rarely, if ever, published in the local newspaper.

I will never get credit again.

Not true. While the bankruptcy will remain on your credit report for up to 10 years, there are ways to improve your credit. For example, continue to make payments on secured debt (e.g. vehicle payments and mortgage payments) as these are reported every month to the credit reporting agencies. Another good way to improve your credit is to purchase a CD from your local financial institution and then take a loan against it. As you continue to make the monthly payments, your credit score will be positively affected.

Both my spouse and I need to file.

Not necessarily. Wisconsin is a marital property state. As such, all debt incurred during the marriage is presumed to be for the benefit of the marriage. Marital property, such as wages of either spouse, can be garnished to pay for marital debt. Therefore, in most cases it is a good idea for both spouses to file a joint bankruptcy to eliminate their individual debt and the debt accumulated during the marriage. However, there are instances where only one spouse needs to file bankruptcy. In such a situation, the discharge prevents a creditor for pursuing the individual property of the non-filing spouse as well as the marital property of the couple.

Back taxes survive the bankruptcy.

For the most part, this is true. It is possible to discharge income taxes that are more than three years old, but to do so, certain conditions must be met.

I can max out my credit card immediately before filing bankruptcy

This would be fraud and would survive the bankruptcy.

There Are Many Questions In Bankruptcy. We Have Answers.

We help people from Oshkosh, Green Bay and across Northeastern Wisconsin with bankruptcy issues. Contact us today in our Appleton office to set up a meeting. Our number is 920-659-5606.