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Lose your debt, not your property, by filing for bankruptcy

| May 25, 2017 | Personal Bankruptcy |

If you are like one of the many Wisconsin consumers who are currently dealing with overwhelming debt, you know how overwhelming this situation can be. From facing threats of foreclosure to fielding phone calls from creditors at all hours, being in debt can be stressful for every member of the family. 

You may be able to find relief from your debt and secure a better future for you and your loved ones by seeking bankruptcy protection. For many consumers with certain types of debts, such as medical bills and credit card debt, Chapter 7 is a viable option. Many consumers fail to take advantage of this option, however, because they fear that liquidation bankruptcy will mean that they have to give up all of their property.

What you get to keep in bankruptcy

While Chapter 7 bankruptcy also goes by the name liquidation bankruptcy, it does not mean that you will necessarily lose what is most important to you. Bankruptcy law allows for some exemptions, which means that you may be able to keep much of your stuff.

In Wisconsin, you are entitled to keep many items of value, including the following:

  • Household furnishings
  • Necessary clothing
  • Pensions and other retirement assets
  • Tools of the trade and stuff needed for work
  • Vehicles worth up to a certain value
  • Appliances in the home
  • Certain amount of equity in the home
  • Damages from a personal injury claim
  • Public benefits
  • Jewelry
  • Unpaid wages

There a value limits set on the exemptions. It is important meet with an attorney to discuss your bankruptcy options. Your attorney can help you with pre-bankruptcy planning decisions so you can avoid mistakes with your property.

The point of bankruptcy is not to leave an applicant destitute with no personal belongings, but to provide a person with an opportunity to claim a fresh financial start.

What may not be protected in bankruptcy

While much of your property may be exempt, there are things that are not eligible for exemption, including:

  • Second or vacation homes
  • Second car, truck or other motor vehicle
  • Items whose value exceeds your available exemptions

Before you file for bankruptcy, you should meet with an attorney to discuss the best way to protect your possessions while taking advantage of bankruptcy. Even if you have items that may not be covered by bankruptcy exemptions, it may be possible to protect them.

Before attempting to anticipate what will be covered and what will not be covered, talk to an attorney who can review your personal situation. When you know what to expect, the bankruptcy process can be less complicated.

Making the right choice

Making the choice to file for bankruptcy is not an easy one. It can be difficult to know if it is the right step for you, but by seeking the guidance of an experienced bankruptcy attorney, you can make a decision that is positive and lays the foundation for a strong financial future.

The prospect of losing your property is a daunting thought, but do not let misconceptions about bankruptcy keep you from knowing your options and getting rid of the debt that is holding you down. You always have the right to know your options and to get the information you need to start moving in the right direction.

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