Filing Chapter 13 in Wisconsin

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Before filing for chapter 13, Wisconsin debtors are advised to learn what separates this form of bankruptcy from other chapters. This route requires you to pay back your creditors within three to five years, though you can expect lower interest rates and reduced amounts compared to what you are currently looking at. Before you file for chapter 13, Wisconsin lawyers should be considered since a reputable bankruptcy attorney can successfully negotiate with your creditors to lower your debts before you start making payments.

Discharge Debts in Three to Five Years

The United States Bankruptcy Code give you three to five years to pay your debts before they are discharged. This means that if a debt is not completely paid off by the time the payment plan is over, it will be written off and you will no longer owe it. You will meet with your creditors, your lawyer and your court-appointed trustee to determine the amount you will pay each month. Most creditors will eliminate late fees and reduce interest rates if you are willing to pay off the debt within three to five years.

Work Together to Create a Plan

Creditors are likely to require you to pay a monthly amount that would allow you to pay off the debt completely within a few years, ensuring they get most of their money. However, if the court determines that you cannot afford the requested payments every month, you will have to reduce it. This means your creditors will be required to lower the amount they want if they hope to get any of your money.

The court will also decide the amount of time you will get for your payment plan, again depending on the amount you owe and your income. Therefore, declaring chapter 13 bankruptcy in Wisconsin is often a group effort that requires cooperation between you, your creditors and your lawyer.

Exceptions

In some cases, you are required to pay off the entire debt before it can be discharged. This is the case with student loans, taxes, and child support or alimony. Therefore, the amount you owe will be divided by the number of months in your payment plan, which is anywhere from 36 to 60 months. Only in extreme cases, such as a complete inability to work due to a disability, will you be able to reduce such debts. Therefore, plan to pay them off entirely within five years at the most.

Talk to a Lawyer

It is important to get the advice of a lawyer before you file for chapter 13 bankruptcy. Wisconsin attorneys usually offer a free consultation to discuss your financial situation. Depending on your specific circumstances, you should be able to discharge all your debts within three to five years.

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