Wisconsin Chapter 7 Bankruptcy Lawyers by dqu15310


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									Individual Bankruptcy
 A Client's Guide to the Language and Procedure

          LAW OFFICES

Thank you for choosing Bakke Norman, S.C. to represent your interests.

Your satisfaction is very important to us and forms the basis for our formal
quality pledge:

    O To provide the highest quality legal service to the clients we serve,
    O To develop and maintain the highest personal and professional
        standards and reputation, and
    O To provide a quality professional work opportunity for attorneys
        and staff.

We welcome your feedback at all times.

This booklet has been written to acquaint you, in general, with how we handle
cases like yours. We hope it will be helpful to you.

                                                            LAW OFFICES

   Bakke Norman represents clients who file for relief under the Bankruptcy Code.
            Under federal law, Bakke Norman is a debt-relief agency.
Bankruptcy Lawyers: Who are they?
What do they do? How much will they charge?
B   akke Norman, S.C. has experienced attorneys
with expertise in bankruptcy proceedings. We
                                                        This booklet is designed to provide a very broad,
                                                        general orientation to the subject of bankruptcy
employ skilled legal assistants to help you and         and is not intended to substitute for professional
your attorney with your file and to assure you of       legal advice. Our bankruptcy clients' financial
the best professional representation. In addition       affairs deserve careful analysis and professional
to a skilled and experienced staff, we utilize a        attention — more attention than can be provided
complete professional research library, comput-         in this short booklet.
erized research facilities and the latest in computer
technology to help efficiently process your work.

One of our legal assistants will be assigned to         O What Will It Cost?
assist you and your attorney in handling your           We are committed to providing our clients with
file. You are encouraged to contact the legal           a clear understanding of their potential legal
assistant regarding your file if the attorney is        fees before beginning representation.
not available. Although a legal assistant is not a
lawyer and is not permitted to give legal advice,       Bakke Norman, S.C. generally handles Chapter 7
there are many questions that the legal assistant       and Chapter 13 cases on a flat fee basis. Chapter 7
can answer regarding your situation. Questions          fees are required to be paid in full prior to filing
seeking legal advice will be referred to your           and Chapter 13 fees may be paid as part of the
attorney by the legal assistant.                        Chapter 13 plan.

                                                        Before beginning work on your file, we will

O What Do Bankruptcy
                                                        enter into a fee agreement which will include
                                                        specific information regarding the amount of our
                                                        fees and scope of our services. In addition, there
  Lawyers Do?                                           is a filing fee which must be paid to the Court
Bankruptcy laws, like most other laws, are              at the time of filing. Clients are also required to
complex and detailed. Your lawyer will advise           complete sessions for credit counseling and
you about the law and help prepare the docu-            personal financial management. These fees are
ments necessary for your case. We will keep you         in addition to the legal fees charged by Bakke
informed about the status of your bankruptcy            Norman, S.C.
case and give you our advice regarding any
options you have. Through careful planning
concerning the content of your bankruptcy
schedules and the timing of the actual filing,
bankruptcy attorneys seek to maximize the
benefits of a bankruptcy filing for their clients.
O Telephone Calls                                     proceedings are held at the federal courthouse
                                                      in Eau Claire.
  and E-mails                                         Although protection from creditors is available
The telephone is an important tool for the
                                                      under the bankruptcy process, one of the most
ongoing communication between attorney
                                                      important things we can do for a client is to
and client. We welcome your calls and e-mail
                                                      consider alternate solutions before recommend-
messages with questions about your case or
                                                      ing bankruptcy. Alternate options may include
with new information that we need. When your
                                                      the refinancing of some debts, a negotiated
attorney is in court or meeting with another
                                                      debt reduction or a restructured payment plan.
client, your call will be referred to the legal
                                                      Creditors are frequently willing to accept a
assistant handling your case. Please be prepared
                                                      reasonable payment plan that avoids the expense
to discuss the matter completely with the legal
                                                      and inconvenience of a formal bankruptcy filing.
assistant. If it is essential that you talk person-
ally to your attorney, leave a detailed message
                                                      There are several different sections of the bank-
and your attorney will return the call as soon
                                                      ruptcy code which apply to different types of
as possible.

                                                        • Chapter 7 is used by individuals and
O What Is Bankruptcy?                                     businesses to liquidate their remaining
Bankruptcy is a legal process that protects               assets, discharge their debit and obtain
debtors from legal collection action by creditors.        a fresh start.
Bankruptcy can prevent or stop garnishments,
attachments and foreclosures. This protection is        • Chapter 11 is used by businesses and
available to individuals, sole proprietorships,           individuals engaged in business to
partnerships and corporations. You are eligible           reorganize their operations and
for bankruptcy if you have debts that exceed the          restructure their debts.
value of your assets and if, for other reasons, you
cannot pay all of your bills as they come due.          • Chapter 12 is used by family farmers to
                                                          reorganize their farm operation and
Bankruptcy laws were passed to provide a                  restructure their debt.
fresh start to those who have tried and failed.
The bankruptcy process can release an individ-          • Chapter 13 is used by individual wage
ual from debts incurred in a business venture             earners to reorganize their finances and
as well as consumer debts. However, the                   pay off a portion of their debts pursuant
bankruptcy code also contains provisions which            to a three or five-year repayment plan.
are designed to prevent abuse by individuals
who recklessly incur consumer debt.

Bankruptcy protection is provided by federal
                                                      O Liquidation Under
law, not state law. Therefore, all bankruptcy
proceedings are conducted at a federal court-
                                                        Chapter 7
                                                      Chapter 7 is frequently referred to as
house and not at a local county courthouse. For       “liquidation” or “straight bankruptcy“ and
residents of west central Wisconsin, almost all       is available to individuals, corporations or
partnerships. The goal of a Chapter 7 filing is
to obtain total and permanent relief from all         O Wage Earner Plan
dischargeable debts. After a successful Chapter 7
proceeding, the debtor will no longer have any
                                                        Under Chapter 13
                                                      Aside from Chapter 7, individuals also frequently
legal obligation to make payment to most credi-
                                                      choose to file pursuant to Chapter 13 of the
tors. Although there is no personal obligation
                                                      Bankruptcy Code. This chapter is not available
to repay secured debts, valid liens survive the
                                                      to corporations or partnerships. Unlike a
bankruptcy discharge as to those particular
                                                      Chapter 7 bankruptcy, a person filing under
debts. A creditor holding security for its debt
                                                      Chapter 13 is required to pay adjusted debts
may therefore foreclose on the debt and obtain
                                                      according to a plan of repayment that is
possession of the collateral even if that debt has
                                                      approved by the Court. Chapter 13 offers legal
been discharged by the Bankruptcy Court. For
                                                      protection from collection actions and is normal-
instance, a bank with a mortgage on a house
                                                      ly used to cure defaults on home mortgages and
may foreclose its mortgage and obtain posses-
                                                      car loans. Chapter 13 debtors contribute all of
sion of the house if the mortgage note is not
                                                      their disposable income to the bankruptcy
paid. It is therefore common to continue to pay,
                                                      trustee for a three or five-year period in
or "reaffirm," certain secured debts even after
                                                      repayment of their secured and unsecured debts.
filing bankruptcy.
                                                      Upon successful completion of the Chapter 13
                                                      plan, the balances remaining on most of the
In exchange for a discharge of debts, the
                                                      debts are discharged.
bankruptcy debtor must turn over all non-
exempt property to the bankruptcy trustee.
                                                      An advantage of a Chapter 13 bankruptcy is
Exempt property may be retained by the debtor.
                                                      that certain debts which are non-dischargeable
The law provides an extensive list of exempt
                                                      in a Chapter 7 (such as debts based on fraud
property that a debtor may keep. Exemptions
                                                      and debts arising from a divorce that are not for
are discussed in more detail later in this booklet.
                                                      maintenance or support), are dischargeable in a
                                                      Chapter 13.
Under the bankruptcy law some debts are not
discharged. Non-dischargeable debts include
most child support, spousal maintenance
(alimony), most student loans, most taxes,            O Financial Disclosures
certain fines or penalties payable to a govern-       When we prepare a petition asking the court to
mental unit, and debts resulting from injuries to     grant bankruptcy protection for our client, we
another person due to driving while intoxicated.      must also file specific schedules giving detailed
In addition, debts incurred by fraud or as a          information about our client’s current financial
result of willful or malicious injury to another      status and financial history. This required infor-
or another's property are generally non-              mation can be lumped into the following four
dischargeable. These are only examples; there         broad categories.
are other categories of non-dischargeable debt
which are applicable in special circumstances.        Debts
                                                      We must provide a list of the names and
                                                      addresses of all creditors, the amount owed,
                                                      the reason for the debt and a description of any
                                                      mortgage or security held by the creditor.
We must provide a description and a stated           O Exemptions
value of all real estate, vehicles, bank accounts,   Exemptions are a vital part of ensuring that one
retirement accounts, accounts receivable, tax        of the fundamental purposes of the Bankruptcy
refunds, personal property and any other             Code — providing the debtor a fresh start — is
property owned by the bankrupt. A debtor’s           fulfilled. A fresh start would be impossible if
claims against another are also considered an        the bankruptcy process stripped debtors of all of
asset and must be disclosed.                         their property. Some states, including Wisconsin,
                                                     have laws which protect certain debtor property
Statement of Affairs                                 from being taken by creditors to satisfy a debt.
We must give detailed information about any          Federal law also provides specific exemptions
voluntary payment of money or transfers of           for use by individuals filing bankruptcy.
property made within the last twelve months,         Wisconsin residents may select either the federal
as well as information about any involuntary         or the state exemptions, but not both. We assist
payments or transfers made as a result of a          our clients in making this selection by analyzing
creditor’s legal action. We must also provide        their property and comparing the advantages
information about the existence and location         and disadvantages of both options.
of the bankrupt’s financial books and records.
                                                     Under Wisconsin laws, property that may be
Income and Expenses                                  exempt includes up to $40,000 of equity in a
We must give the Court details of all debtor         homestead; retirement funds; some equity in a
income, including income tax returns, and a          vehicle; household furniture and appliances;
detailed list of monthly living expenses. If the     some livestock and farm machinery; and tools
debtor owns a business, we must also report          of the debtor's trade. This is only a partial list of
the business' income and expenses.                   exemptions. Your attorney will discuss all the
                                                     options available.
Accuracy, completeness and total honesty is
required in all dealings with the Court. All         If property is exempt, it does not have to be
written and oral information must be given           turned over to the bankruptcy trustee. However,
under oath. Any failure to give complete and         if the exempt property is subject to a mortgage
accurate information is subject to the perjury       or a security interest, the creditor holding the
laws and can also result in the loss of some or      security may be able to foreclose and take the
all of the valuable protections under the            property even if the debt is discharged. One
Bankruptcy Code. The Bankruptcy Code                 way to prevent such a foreclosure is to reaffirm
provides many advantageous rights to debtors;        and pay the debt. The decision to reaffirm a
however, it also imposes many responsibilities       debt should not be made lightly; it should
upon them. Debtors seeking to benefit from the       only be made after careful consideration and
protections offered by the bankruptcy process        consultation with your attorney.
must, in turn, strictly comply with the disclosure
requirements and other responsibilities imposed
by that process. All assets and all debts must be
listed on the schedules and disclosed to the
                                                     O Automatic Stay
                                                     At the time a bankruptcy case is filed, an
Court. Bankruptcy fraud is a federal crime with      automatic stay is established. This prevents
very serious consequences.                           any creditor from pursuing most collection
actions against a debtor without first obtaining    debtor and the creditor that the debtor will pay
the permission of the Bankruptcy Court. The         all or a portion of the money owed, even though
automatic stay prohibits creditors from continu-    the debtor has filed bankruptcy. In return, the
ing lawsuits, garnishments or foreclosures, or      creditor promises that as long as payments are
from sending collection letters or making           made, the creditor will not repossess or take
telephone calls to the debtor. Under Chapter 13,    back the property.
the stay also applies to cosigners or guarantors
of debts which the debtor is obligated to pay.      If it is necessary to reaffirm a debt, your attorney
                                                    must be involved to ensure that your rights are
                                                    protected and that the reaffirmation is in your

O Discharge and                                     best interest. Generally, the purpose of
                                                    filing the bankruptcy is to discharge debt
  Reaffirmation                                     obligations. Consequently, the right to reaffirm
                                                    a debt should be used sparingly and only when
The bankruptcy law regarding the scope of the
discharge is complex. As a general rule, however,   necessary.
individuals are discharged in more than 99
percent of Chapter 7 cases (excluding cases
which are dismissed or converted). In most
cases, a discharge will be granted under
                                                    O Credit Rating
                                                    Clients are normally concerned about the effect
Chapter 7 relatively early in the case, that is,    of a bankruptcy on their credit rating. Certainly,
60 to 90 days after the date of the first meeting   whenever a debtor's financial picture has deteri-
of creditors, unless a complaint has been filed     orated to the point that bankruptcy is an option,
objecting to the discharge or the debtor has        his or her credit rating has already suffered. A
reaffirmed a particular debt.                       bankruptcy can be part of the debtor's credit
                                                    history for up to ten years.
Grounds for denying the debtor a discharge
include failure of the debtor to keep or produce    Some banks and other lenders will deny credit
adequate books or financial records; failure        on this basis, some will not. There are laws that
to satisfactorily explain any loss of assets;       protect the misuse of this information; and, it
commission by the debtor of a bankruptcy            cannot be used to deny employment or termi-
crime (such as perjury); failure to obey a lawful   nate current employment.
order of the bankruptcy court; or fraudulent
transfer, concealment or destruction of property    Frequently, the real issue should not be the
which would have become property of the             effect on the credit rating, because the debtor’s
debtor’s bankruptcy estate.                         credit rating is usually very poor anyway.
                                                    Rather, the real issue is whether it is realistic to
Because secured creditors retain some rights        improve the debtor’s financial condition and
which may permit them to seize the secured          credit rating through conservative spending
property even after a discharge is granted, a       habits and careful saving or through bankrupt-
debtor wishing to keep possession of the            cy's fresh start. Either way, improved credit
secured property, such as an automobile or          will take time and financial discipline.
home, may find it advantageous to “reaffirm”
the debt rather than surrender the property. A
reaffirmation is an agreement between the
O Bankruptcy Terms and Definitions
Adversary Proceeding                           Credit Counseling Course
 A lawsuit in the U.S. Bankruptcy Court          A single session course that must be com-
 that is related to a bankruptcy case.           pleted within 180 days prior to filing the
 Adversary proceedings are typically filed       bankruptcy petition. The course can only
 by creditors seeking to have their debt         be offered by organizations approved by
 declared non-dischargeable by the               the office of the United States Trustee.
 Bankruptcy Court.
Automatic Stay                                   A person or entity who is owed money
 An injunction, or court order, that takes       by the debtor.
 effect when a bankruptcy petition is filed.
 An automatic stay prohibits all collection    Debtor
 action against a debtor. It affects a broad    One who files the bankruptcy petition.
 range of activities against the debtor,        In bankruptcy, the bankrupt individual
 property of the debtor and property of         and/or business that is under the protec-
 the bankruptcy estate. The automatic stay      tion of the bankruptcy court.
 ceases when a debtor is discharged or a
 bankruptcy case is closed.                    Discharge
                                                 A discharge in bankruptcy relieves the
Bankruptcy Code                                  debtor of the dischargeable debts
  The body of a federal statutory law that       incurred prior to filing. Discharge is the
  governs the bankruptcy process.                legal term for the elimination of debt
                                                 through bankruptcy. Certain debts of an
Bankruptcy Petition                              individual, such as child support, are
  The legal document filed with the              normally non-dischargeable.
  bankruptcy court that commences a
  bankruptcy proceeding.                       Dismissal
                                                 The premature termination of a bankruptcy
Confirmation                                     case. The dismissal of a bankruptcy case
  The process by which the bankruptcy            in effect returns the debtor to the same
  court approves the terms of a Chapter 11,      position the debtor was in before the
  12 or 13 plan of repayment. Confirmation       bankruptcy was filed.
  of a plan implements the terms of the
  plan.                                        Dividend
                                                 The distribution to creditors of the bank-
Conversion                                       ruptcy estate’s assets made according to
  The changing of a bankruptcy case from         the schedule set forth in the Bankruptcy
  one chapter type to another.                   Code. No dividend in any amount less
                                                 than $5 should be distributed by the
                                                 trustee to any creditor unless authorized
                                                 by order of the court.
Exemption or Exempt Property                    Personal Financial Management Course
  Property of an individual debtor that the       A single session course that must be
  law protects from the actions of creditors,     completed within 45 days after the first
  such as the debtor’s residence or home-         meeting of creditors. The course can only
  stead, automobile, tools of the trade, etc.     be offered by organizations approved by
                                                  the office of the United States Trustee.
Involuntary Bankruptcy Petition
  The filing of a bankruptcy petition by a      Plan of Reorganization
  group of creditors against an individual        The document filed by the debtor in a
  (or business entity) who is indebted to         Chapter 11, 12 or 13 bankruptcy case.
  them. The debtor is thereby involuntarily       The plan contains the terms by which
  forced into bankruptcy.                         the debtor proposes to pay his/her out-
                                                  standing debts. The terms of the plan are
Judgment                                          negotiated with the debtor's creditors; the
  The official decision of the court regard-      plan itself is subject to court confirmation.
  ing the rights and claims of the parties to     Once confirmed, the plan constitutes a
  a lawsuit.                                      new contract between the debtor and
                                                  the debtor's creditors.
  A creditor's interest in property securing    Property of the Estate
  the repayment of a debt.                        All property of the debtor of whatever
                                                  kind or nature.
 A request for the court to take a specified    First Meeting of Creditors
 action. A motion may be filed in an            (Section 341 Meeting)
 adversary proceeding or bankruptcy case.         The first meeting of the debtor's creditors.
                                                  The meeting is conducted by the trustee
Notice                                            assigned to the debtor’s bankruptcy case.
 Information given in written form                The debtor submits to questioning
 advising certain parties of some fact            (usually very brief) by the trustee or the
 which they are entitled to know. The             debtor's creditors concerning income and
 court or moving party sends notice to            other assets, location and condition of
 advise parties of a scheduled hearing, a         collateral, recent transfers of assets, and
 sale to take place, etc.                         intentions as to certain debts. The debtor
                                                  is required to attend this meeting.
Parties in Interest
  The individuals or entities which have an     Trustee
  interest in a particular bankruptcy case.       An officer of the court appointed to take
  These include, among others, the interim        custody of the assets of a bankruptcy
  trustee, U.S. Trustee, debtor, debtor’s         estate. The trustee oversees the liquida-
  attorney, creditors and moving parties.         tion or distribution of assets to unsecured
O Notes

Copyright ~ 2008, 2009   R1009
Bakke Norman, S.C.
                          Local Lawyers ~ Statewide Reputation

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