Bankruptcy in Ripon, Wisconsin is a court procedure which allows an individual or business who is drowning in debt to be absolved of their legal obligation 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 absolved of their obligation to pay their debts just because they don't want to. It is meant to serve as a lifeline, preventing unmanageable 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 severely damage a person's credit rating.
Therefore, it is prudent to consult with an experienced Ripon, 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 Ripon bankruptcy attorney cannot be substituted.
Types of Bankruptcy in Ripon, Wisconsin
In Ripon, Wisconsin, 3 types of bankruptcy procedures are in common use: Chapter 7, Chapter 11, and Chapter 13. Being governed by federal law, the procedures involved in filing for bankruptcy in Ripon, Wisconsin will be about the same as anywhere else in America. Chapter 7 bankruptcy involves liquidation of many of the debtor's assets in order to pay off as much of the debt as possible. This sounds harsh, but there is an upside: once the liquidation is complete, the debts are legally viewed as having been paid in full, whether or not the full amount was covered by the liquidation. Liquidation involves selling some personal property, and using the proceeds to pay off debt. Varied types of property are exempt from liqudiation, and therefore may not need to be sold. They include homes, cars, and insurance policies, among others. You should know that some types of debt cannot be discharged in Chapter 7 bankruptcy, including taxes, student loans, and child support.
The other normally used bankruptcy system in Ripon is Chapter 13 bankruptcy. This allows a debtor to repay most or all of their debts in a structured manner. It reorganizes the debt into lower periodic payments that, with a bit of frugality, the debtor should find manageable. This allows the debtor to continue to earn a living, and allows the creditors to eventually collect what they are owed. Once a repayment plan is approved by the bankruptcy court, creditors are legally barred from seeking repayment under the terms of the contracts that gave rise to the debt in the first place, and will instead have to accept payment under the new plan. Chapter 13 bankruptcy is normally a better option for people who have a steady income. Chapter 11 bankruptcy is almost exclusively used by businesses, but there is nothing that legally prevents it from being used by individuals, and its use by individuals is very rare. Chapter 11 bankruptcy requires the debtor to come up with a restructuring plan - telling the court how they propose to cut costs, improve their operations, and pay down their debts. The plan has to be approved by a majority vote of participating creditors.
A main advantage of Chapter 11 bankruptcy is that businesses can continue their operations while going through the process. Also, they can continue to buy and sell their stock.
How Can a Ripon Bankruptcy Lawyer Help?
The decision to file for bankruptcy in Ripon is not one to be made lightly, and it certainly should not be made without first obtaining the advice of an accomplished Ripon bankruptcy attorney.