You may have experienced a recent financial hardship and are considering a Chapter 13 bankruptcy in Wisconsin. Filing Chapter 13 is a big decision. You are committing to a bankruptcy repayment plan that could last for up to five years
This is why understanding the bankruptcy differences and understand your Chapter 13 plan payment is crucial to making the most informed decision. Let’s get started.
1) Wisconsin Bankruptcy Cases — Chapter 13 or Chapter 7
Most consumer debtors (the person filing for bankruptcy relief) file under Chapter 13 or Chapter 7 of the Bankruptcy Code. You may want to understand the differences as Chapter 7 bankruptcy is often less expensive and can get you out of debt sooner.
Chapter 7 bankruptcy can be a liquidation bankruptcy. Bankruptcies filed under Chapter 7 are intended for individuals who cannot afford to repay their debts after paying normal living expenses. You must meet income qualifications to file under Chapter 7. Even though Chapter 7 may be less expensive to file than a Chapter 13 case, it does not offer some of the benefits of filing Chapter 13.
- Lower the amount you owe on unsecured debts (debts that are not secured by collateral like credit card debts and medical debts)
- Catch up back mortgage payments to stop foreclosure
- Lower your car payments, if you qualify
- Stop wage garnishments and repossessions
- Catch up back taxes, alimony, and child support
- Protect your property from creditors and the court
Chapter 13 has distinct advantages. However, you are committed to a three to the five-year bankruptcy plan. You cannot borrow money or sell major assets without court approval. However, you can get rid of debts and rebuild your financial well-being without fear of losing your home, car, and other assets.
2) Calculating the Chapter 13 Plan Payment in Wisconsin
The Chapter 13 bankruptcy Wisconsin plan payment estimate factors in the IRS National expense figures in addition to specific Wisconsin expenses. The calculations are complex and are unique to your financial situation, so we built the Wisconsin Chapter 13 plan payment calculator below.
A Chapter 13 plan payment is one of the most important things to consider when considering a Chapter 13 bankruptcy. Are you able to afford the plan payment each month when compared to your other expenses? The plan is based on a variety of factors that are accounted for in the calculator below, which is based on the official bankruptcy forms.
Factors used when calculating a Chapter 13 plan include, but are not limited to:
- Disposable Income — The amount of income you have each month after subtracting allowable payroll deductions and allowable living expenses from your gross monthly income.
- Assets — In some cases, the value of your assets could increase the amount of your Chapter 13 plan if your assets have large amounts of non-exempt equity. We discuss Texas bankruptcy exemptions in more detail below and how exemptions impact your Chapter 13 plan.
- Debts — Some debts must be paid in full through the Chapter 13 plan (priority unsecured debts such as taxes, alimony, child support, and administrative costs). Other creditors may receive partial payments, including unsecured debts, such as medical bills, credit card debt, and personal loans. Chapter 13 plans typically include back mortgage payments and car loan payments.
- Recent Financial Transactions — Some recent financial transactions could impact your Chapter 13 plan.
You can also explore detailed information about Chapter 13 by reading our article entitled “Chapter 13 Bankruptcy – Everything You Need to Know.”
3) Wisconsin Means Testing for Chapter 7
The Means Test compares your income to the income of households in Wisconsin. If your average income is below the median income in Wisconsin, you may qualify for a bankruptcy discharge under Chapter 7.
The income is based on the number of people in your household. The data used to calculate the figures for the Means Test is updated periodically to reflect the most recent statistical data for income and expenses.
The most recent data for the Wisconsin Means Test applies to cases filed on or after May 15, 2021. For each person in the household, add $9,000 for each person in the household. You must ensure that you are using the most recent figures available when calculating the Means Test. The figures change periodically.
|# of People||Annual Income|
4) Wisconsin Bankruptcy Exemptions
Bankruptcy exemptions allow debtors to claim a certain amount of equity in specific property exempt from the bankruptcy case. In a Chapter 13 case, exempt equity is not used when calculating a Chapter 13 payment.
In Wisconsin, you can choose between federal bankruptcy exemptions or Wisconsin bankruptcy exemptions. The federal and state bankruptcy exemptions differ. Therefore, you want to carefully analyze the allowed exemptions to determine whether the federal or Wisconsin bankruptcy exemptions offer better protection in your case.
Wisconsin bankruptcy exemptions can be found in the Wisconsin Statutes. A bankruptcy attorney can help you compare the most current federal and state exemptions to determine which set of exemptions you should use when filing Chapter 13 in Wisconsin.
5) Bankruptcy Courts in Wisconsin
There are two bankruptcy districts in Wisconsin — Eastern and Western. You can locate which district and division your Chapter 13 case will be filed in by locating your county on this Wisconsin bankruptcy jurisdictional map.
The Bankruptcy Court for the Western District of Wisconsin has two court locations or divisions. One is located in Madison at 120 North Henry Street and the other is located in Eau Claire at 500 South Barstow Street. The Chapter 13 trustees hold 341 Meetings (First Meeting of Creditors) in several locations. For example, your county of residence determines your 341 Meeting location. A list of 341 Meeting locations are available on the bankruptcy court website.
The Bankruptcy Court for the Eastern District of Wisconsin has just one division. The bankruptcy courthouse is located in Milwaukee at 517 East Wisconsin Avenue. 341 Meeting locations in the Eastern District are also determined by your county of residence.
6) Wisconsin Chapter 13 Bankruptcy Trustees
A bankruptcy trustee is assigned to your Chapter 13 case to administer the bankruptcy case. The Chapter 13 trustee receives your payments each month and distributes payments to your creditors according to your confirmed Chapter 13 plan.
Three Chapter 13 trustees serve in Wisconsin. You are assigned a Wisconsin Chapter 13 trustee based on the location of your bankruptcy filing. See the Wisconsin Chapter 13 Trustees below:
|Eastern||Rebecca R. Garcia||(920) 231-2150|
|Eastern||Scott A. Lieske||(414) 271-3943|
|Western||Mark W. Harring||(608) 256-4320|
Should I File a Chapter 13 Bankruptcy Case?
Deciding whether to file a Chapter 13 bankruptcy case can be difficult. There are many things to consider before filing for bankruptcy relief, including alternatives to bankruptcy. You can estimate you compare alternatives, estimate your plan payments and compare pros and cons using the Wisconsin Chapter 13 Calculator below.
We also have a debt consolidation comparison calculator available on our website and Debt Settlement Guide and Debt Management Guide to help you compare your bankruptcy and non-bankruptcy options for debt relief. To help you understand the process, we have also created the video below to summarize a Wisconsin Chapter 13 bankruptcy.
Ascend helps consumers review various debt relief options to find an option that works for them. If you are ready to get out of debt, we can help.