Bankruptcy in Delavan, Wisconsin is a court process which allows an individual or business who is drowning in debt to be relieved of their legal requirement to pay off some or all of their debt. Hopefully, this will allow both the debtor and creditors to move on with their lives. Of course, one should never view bankruptcy as a "get out of debt free" card, allowing someone to be relieved of their requirement to pay their debts just because they don't want to. It is meant to serve as a lifeline, preventing uncontrollable debt from resulting in complete financial ruin. Accordingly, it is best treated as an option of last resort, because it can carry with it significant negative consequences, which must be weighed against the possible benefits. For example, filing for bankruptcy can heavily damage a person's credit rating.

Therefore, it is advisable to consult with an experienced Delavan, Wisconsin bankruptcy attorney, who can advise you of the costs and benefits of bankruptcy. Because the decision to file for bankruptcy depends very heavily on the facts of each individual case, the advice of a Delavan bankruptcy attorney cannot be replaced.

Types of Bankruptcy in Delavan, Wisconsin

In Delavan, Wisconsin, there are three basic bankruptcy schemes that are most commonly used. They are known as Chapter 7, Chapter 13, and Chapter 11. Being a product of federal law, the procedural rules governing bankruptcy in Delavan, Wisconsin will be very similar to those in any other part of the United States. Chapter 7 bankruptcy, or "liquidation," requires the debtor to sell some of his or her property to the highest bidder, and using the funds from the sale to pay down as much debt as possible. Once the sale is complete, all dischargeable debt is deemed paid in full, whether or not the sale was able to raise the full amount owed. You should note that some property (usually the types of property deemed essential) is fully or partially exempt from liquidation, meaning that the debtor gets to keep it. This includes houses, cars, and retirement accounts, among others. Some types of debts, however, cannot be discharged in bankruptcy, including taxes, child support, and student loans.

The other frequent bankruptcy scheme used by consumers in Delavan is Chapter 13 bankruptcy. In this system, debt is not discharged. Instead, it is restructured. This allows the debtor to have the terms of the agreements that gave rise to their debts in the first place thrown out, and replaced with new terms that call for a structured repayment plan, designed to allow the debtor to survive on whatever income they have, and allowing the creditors to get paid back eventually. Once a payment plan is authorized, creditors are not allowed to attempt to collect payment under the original agreements. Chapter 11 bankruptcy is primarily used by businesses, though it can be used by individuals (which is quite rare). Chapter 11 bankruptcy requires that the debtor come up with a reorganization plan - essentially telling the court how they propose to cut costs, streamline their operations, and pay their debts. This plan must be authorized by the participating creditors through a simple majority vote.

One advantage of Chapter 11 bankruptcy is that it allows a business going through it to continue operating, and to trade its stock.

How Can a Delavan Bankruptcy Lawyer Help?

One should not make the decision to file for bankruptcy in Delavan easily. Before making any such decision, it would be highly advisable to contact an experienced Delavan bankruptcy attorney.