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Overview - Q & A
Chapter 7

Chapter 7 is a liquidation that allows you (debtor) to permanently eliminate debts, such as credit cards and medical bills, while often allowing you to retain your personal property.

Chapter 13

Chapter 13 is a rehabilitation or reorganization, not liquidation of the debtor's assets.  Attorney Kessler will work with you to help design a plan for approval, which allows you to keep the property that you want, while still permanently eliminating a large portion of your unsecured debts, like credit cards and medical bills.

Chapter 128 (Wisconsin Law)

Chapter 128 is not a bankruptcy, but rather a state law available only to Wisconsin residents.  Known as a personal amotization, Chapter 128 takes the terms of debt repayment or negotiation out of the hands of the creditor and empowers you to pay down your debts on your terms without hefty fees and interest.  Chapter 128 is especially effective in dealing with payday or cash advance loans, often drastically slashing monthly or bi-weekly payments.

What does it mean to file bankruptcy?

Bankruptcy is a lawsuit filed in Federal Bankruptcy Court which allows a person who can not pay his or her bills to get a fresh financial start.  The right to file for bankruptcy is provided by Article I of the US Constitution and the Bankruptcy Code.  All cases are handled in federal court.  Filing bankruptcy immediately stops all of your creditors from seeking to collect from you, until your debts are sorted out according to the bankruptcy law.

What does Bankruptcy do?

Bankruptcy can make it possible to:

  • Eliminate the legal obligation to pay most or all of your debts - this is called a discharge.
  • Stop foreclosure on your home, and allow you an opportunity to catch up on missed payments.  (Bankruptcy does not automatically eliminate mortgages and other liens on your property without payment.)
  • Stop wage garnishment, debt collection harassment, and similiar actions to collect a debt from you.
  • Allow you to challenge the claims of creditors who are trying to collect more than they are entitled to collect. 

Does Bankruptcy eliminate all of my debts?

Bankruptcy can not cure every financial problem, and it is not the right step for every person suffering from financial difficulties.  Bankruptcy usually does not allow a filer to:

  • Eliminate debts owed to "secured" creditors.  A "secured" creditor takes a mortgage or other lien on your property as collateral for the loan given to you.  Examples include car loans and home mortgages.  You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additonal money, called a deficiency, if your property is taken.  Regardless, you can't generally keep the car or house unless you continue to pay the loan.
  • Discharge debts singled out by the bankruptcy code for special treatment, such as child support, alimony, certain other debts related to divorce, most student loans, court restitution orders, criminal fines, and some taxes.
  • Protect cosignors on your debts.  When a relative or friend co-signs a loan, and you discharge the loan in bankruptcy, the relative or friend may still have to repay all or part of the loan.
  • Discharge debts that are incurred after bankruptcy is filed.  
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What is the cost to file bankruptcy?

It costs $299 to file for bankruptcy under chapter 7 and $274 to file under chapter 13, whether for one person or a married couple.

Do I need to do anything before filing for Bankruptcy?

You must receive budget and credit counseling from an approved credit counseling agency within 180 days before your bankruptcy case is filed.  The agency will review possible options available to you in credit counseling and assist you in reviewing your budget.  Different agencies provide the counseling in-person, by telephone, or over the Internet.  If you decide to file bankrutpcy, you will need to include in your file a certificate from the agency stating that your received counseling.

What property can I keep?

You can choose between your exemptions under Wisconsin law and under Federal law. 

Will bankruptcy wipe out all of my debts?

No, bankruptcy will not wipe out the following:

  1. Money owed for child support or alimoney, fines, and some taxes.
  2. Debts not listed on your bankruptcy petition.
  3. Loans you got by knowingly giving false information to a creditor. Debts resulting from "willful and malicious" harm.
  4. Most student loans, except if the court decides that payment would be an undue hardship.
  5. Mortgages or other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additonal money if the property is sold by the creditor).

Will bankruptcy affect my credit?

Yes, but bankruptcy is often a better alternative for rebuilding your credit than struggling to pay your bills for years on end.  Bankruptcy can appear on your credit records for ten years, but because your old debts get wiped out you will likely end up in a better position to pay your current bills, and you may be able to get new credit.

You should pull a copy of your credit report a few months after receiving your discharge to ensure that all of your debts are discharged.  Rebuilding your credit is your responsibility and more information regarding credit repair and reporting violations can be found on the Federal Trade Commission's website at:

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm 

Free initial consultations!
Contact us at:

Kessler Law Office, LLC
2901 West Beltline Hwy, Ste 302
Madison, WI  53713
(608) 271-2202
f: (608) 271-4009

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