Those in Wisconsin experiencing economic difficulties may, at some point, consider filing for bankruptcy. Although people often hope for a fast, streamlined process, Chapter 13 bankruptcy can sometimes take up to five years; but, unlike Chapter 7, allows them to save their assets when filing. Of the approximately 1.175 million bankruptcies that were filed in the United States in 2012, 30 percent of the filings were Chapter 13 while the remainder were Chapter 7. Those who file Chapter 13 repay most, if not all, of their debts through a manageable budget plan that is tightly controlled and overseen by a court-appointed trustee.
Chapter 13 bankruptcies are more common in the South for economic and cultural reasons. Some say Southerners are more likely to opt for a Chapter 13 bankruptcy versus Chapter 7 because people in the South are culturally inclined to repay their debts. People also have a fear that if they are unable to save their house, then they may not have a chance to own another house in the future, which is usually a false belief.
The bankruptcy process begins with attending a credit counseling session and obtaining a certification. Participants are asked questions about their income, assets, expenses and goals. Those who earn above their state’s median income level must complete a test which compares income to obligations.
Many people prefer Chapter 7 bankruptcy because they do not wish to be in debt for several years. Others choose Chapter 13 in the interest of causing minimal disruption to their children’s lives. Working with a lawyer who is experienced in bankruptcy law can help people who are considering bankruptcy decide which option best fits their situation.
Source: Fox Business, “Chapter 13 Bankruptcy: How it Works”, Susan Ladika, May 09, 2013
