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Bankruptcy in Wisconsin

Are there any income requirements for filing bankruptcy in Wisconsin?

There are no income requirements in order to file for bankruptcy in Wisconsin.  In fact, people and businesses of all income levels are able to seek bankruptcy relief.  However, the type of bankruptcy which you are allowed to file for will be dictated by your income level. Only those individuals who are able to prove that their annual income was less than the average income level in the State of Wisconsin are permitted to file for Chapter 7 bankruptcy.  All individuals who fail to meet this burden of proof will be required to file for Chapter 13 bankruptcy.

If I am married, do I have to file with my spouse Wisconsin?

Wisconsin is a community property state.  This means that each spouse is equally responsible for all of the marital debt.  If only one spouse files for bankruptcy, the other spouse will still be responsible for 100% of the marital debt.  For this reason, it is required in the State of Wisconsin for both spouses to file a joint petition for bankruptcy in order to have any of their joint debts discharged.

What are the property exemption rules in Wisconsin?

The property exemption rules in Wisconsin are as follows:

-Homestead exemption of up to $40,000 in equity

-Up to $1,200 of equity in one motor vehicle plus any unused portion of household exemptions

-Up to $5,000 in household goods and furnishings, clothing, keepsakes, jewelry and other articles of personal adornment, appliances, books, musical instruments, firearms, sporting goods, animals or other tangible personal property

-Up to $7,500 in equipments, books, tools, or materials necessary for your trade or business

Will all of my debts be discharged as part of a Chapter 7 bankruptcy in Wisconsin?

The bankruptcy court in Wisconsin separates your debts in to two distinct categories.  The first category is known as secured debt.  Secured debt is any debt which required the use of collateral in order to obtain.  Collateral can be anything of value such as your home, car, or cash.  If the creditor has placed a lien on any piece of real property in order to secure their loan, this is considered a secured debt and cannot be discharged.  The second category is unsecured debts.  Unsecured debts do not require you to put up collateral in order to obtain the loan or product in question.  These debts will not result in a lien on any of your property, and therefore can be discharged as part of a Chapter 7 bankruptcy.  Remember that even though a debt is eligible to be discharged does not mean that it will be.  You will need to prove to the court that you are realistically unable to pay back this debt in order to have it discharged by the court.

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