One of the most common questions I get from potential clients who are inquiring about bankruptcy is what different types of bankruptcy are available to individuals.  The answer to that question is that there are two kinds under the Federal Bankruptcy code, found under Chapters 7 and 13. There is also a debt consolidation and repayment plan under Wisconsin State Law called a Chapter 128.

At this point in my practice, I focus solely on Chapter 7 bankruptcies.

A Chapter 7 Bankruptcy is what people usually think about when they hear the word “bankruptcy.”  It is a wiping out of debts, with some exceptions, and getting a fresh start on one’s life, debt free.

Chapter 13 Bankruptcy is a repayment plan over a three to five year period of a portion or, in rare cases, all of one’s debt.  The amount one pays during a Chapter 13 plan is based on disposable income.  While part of the debt is paid back to creditors, a Chapter 13 is still a bankruptcy and is reflected accordingly on a person’s credit report.

Both types of Bankruptcy are overseen by the Trustee’s Office at the Department of Justice.  Quite simply, the Trustee assigned to the case is there to ensure that the process is done correctly and find money for creditors.

To initiate a bankruptcy under either a Chapter 7 or a Chapter 13 requires the filing of a petition with schedules attached.  The petition and schedules show everything that a person owns and owes; everything must be included.  Additionally, they show the person’s income and expenses.

A Chapter 128 reorganization of debt is filed in the Wisconsin Court System and has nothing to do with the Federal Bankruptcy system.  Simply put, it is a repayment plan to repay certain debts over a three-year period.  A Chapter 128 Trustee is appointed by the Court to oversee the process.

Given the amount of information required in Federal Bankruptcy proceedings or the State of Wisconsin Chapter 128, quite a bit of time and energy is spent accumulating all of the information necessary to accurately complete the documents to file with the proper Court.

Give me a call to discuss.