Bankruptcy & Chapter 128

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There are a number of alternatives to provide debt relief for persons suffering from financial difficulties. Filing a bankruptcy petition helps to guarantee people a “fresh start” to get their finances back on track.  A bankruptcy filing can immediately stop garnishments, lawsuits, foreclosures, repossessions, tax levies, and harassing telephone calls.  In some cases, a bankruptcy filing can even allow a person to have his or her driving privileges reinstated.  Most individuals file for bankruptcy under Chapter 7 or Chapter 13.

Chapter 7 bankruptcy can completely eliminate credit card debts, payday and personal loans, medical bills, utility bills, some taxes, and most other types of unsecured debts (debts without collateral).  A typical Chapter 7 case lasts about 3-4 months.  Most people who file for Chapter 7 keep all of their property.  At the end of the case, the Court issues a discharge which wipes away nearly all debts from prior to filing the case.  Some debts, however, are not affected, and I can help to determine which debts will be eliminated in your case.

Chapter 13
 bankruptcy allows individuals up to 5 years to make monthly payments on their debts under a Court-supervised plan.  The size of those payments depends in part on disposable income and the types of debts a person has.  In Chapter 13, it is possible to reduce the interest rate on high-interest car loans, as well as to get caught up on delinquent taxes, mortgage payments, or car payments.  These payments are made to a Court-appointed Trustee, who in turn sends those payments directly to creditors.  At the end of the case, remaining debts (with some exceptions) are discharged and eliminated.  In some cases, a Chapter 13 bankruptcy can even reduce the principal balance on an automobile’s loan to the vehicle’s current value, reduce monthly car payments, and strip off underwater second mortgages and some unsecured liens.

Chapter 128
is state-court proceeding and an alternative to bankruptcy available to Wisconsin residents.  A Chapter 128 case is a court-supervised debt repayment plan available to individuals with steady income that pays off selected debts over a period of up to three years.  Upon filing a Chapter 128, creditors are prohibited from garnishing wages, attaching or executing property.  Chapter 128 can be an attractive alternative for individuals who do not want to, or cannot file for bankruptcy.