Call Us
Chapter 13 bankruptcy can be a ticket to financial freedom. It allows individuals to restructure and reorganize their debt and finances and ultimately satisfy their outstanding financial obligations as required by the Bankruptcy Code.
At Swanson Sweet LLP, we have counseled and represented individuals in Chapter 13 bankruptcy matters for decades. If you are considering Chapter 13, our Wisconsin bankruptcy lawyers would like to meet and discuss your case.
When you file Chapter 13, you instantly receive the protections of the Automatic Stay in Bankruptcy. This means all debt collection efforts against you stop, including the following:
Collection and debt issues are resolved in the Bankruptcy Court, and any required payment will be done pursuant to a court-approved Chapter 13 Plan. Certain debts have to be paid, and certain debts can be discharged, potentially with reduced or no payment required.
Regarding foreclosure, Chapter 13 is a powerful tool to help owners remain in their homes. Once Chapter 13 is filed, the foreclosure will cease, and the debtor can obtain time to cure the delinquent or defaulted mortgage balance.
Certain third parties may find protection during Chapter 13 proceedings. Co-signers, for example, may be protected from collection activity related to co-signed consumer debt while the chapter 13 case is ongoing.
Petitioners are also insulated from most contact with their creditors once their Chapter 13 Plan has been approved, and for the duration of the case. Instead of making payments directly to their creditors, with some exceptions, they make payments through a trustee for the duration of the reorganization plan.
There is a means test with Chapter 13 bankruptcies, which will determine if there is a mandatory minimum amount that must be paid to unsecured creditors, and in all cases, the court will not approve a reorganization plan if the petitioner does not earn sufficient income to sustain the necessary payments over the allotted time.
Chapter 7 also uses a means test, but there are some differences. A petitioner who does not pass the Chapter 7 means test may be required to file Chapter 13 if they want to take advantage of the protections bankruptcy offers. In Chapter 13, qualified retirement contributions can be deducted on the means test, as well as there being a credit for the trustee fees incurred in Chapter 13. It is advisable to seek counsel when preparing to file Chapter 13, as it is a fairly complex process.
Chapter 13 comes with several main eligibility requirements. For instance, the petitioner must:
An attorney will help determine whether you are eligible for Chapter 13 protections. Consulting with a lawyer will also help you choose the most appropriate form of bankruptcy should Chapter 13 not be an option.
Chapter 13 bankruptcy is limited to individuals, and as such, business entities such as LLCs and corporations cannot utilize Chapter 13. However, sole proprietors and certain small business owners can benefit from Chapter 13 individual reorganization protections. Entities seeking to reorganize must utilize Chapter 11 or, for family farmers or fishermen, Chapter 12
Chapter 13 may be the right way out of debt for you. Contact the bankruptcy team at Swanson Sweet LLP by phone or online. Discuss your case with some of the most experienced bankruptcy lawyers in Wisconsin. With offices in Madison, Oshkosh, and Milwaukee, and remote meeting options available, we serve clients throughout the State of Wisconsin
